Reviving Your Business Finances Is No Magic Debt Consolidation And Debt Management...

Reviving Your Business Finances Is No Magic Debt Consolidation And Debt Management Measures That Work

By Charlie Brown | Writer-At-Large on April 12, 2018
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So you had plans for owning a successful business, but then everything went haywire. Right now, you are drowning in a pile of unpaid bills and losing your sleep over calls from unpleasant creditors. You must be cursing the day when the idea of starting a business even struck you. Is there no end to the misery? Will the annoying phone calls from irate lenders never stop coming?

There is a better way to end this suffering than throwing away your business plans, hopes, and dreams! Running away has never solved anything and bankruptcy has never shaken off the small business lenders. Moreover, bankruptcy overtly defines a business that is already dead and an entrepreneur who has given up too easily. Filing for bankruptcy is not hard at all, and that is for the perfect reason to do it. Business owners, who file for bankruptcy, are ineligible to qualify for a new business loan in the next decade or so. The assets that go on stake vary as per the type of bankruptcy you file.

Have you made too many bad financial decisions?

Watching your business dreams crumble into pieces is one of the most painful things in life. Businesses often accumulate several debts over time. Many of these lenders are quite notorious when it comes to interest rates and repayment terms. Defaulting on payments usually attracts hefty penalties that further deplete the finances of a struggling business.

The first step towards lifting your business up from under the pile of debts is assessing the ongoing expenses. It will include the vendor payments, employee salaries and the lender payments for every month. Learning from your mistakes is, of course, a way to embrace success, but when it comes to multiple debts, you just cannot afford to make mistakes. Use the current expense chart to draft a business budget. Every business needs to work on a reliable yet flexible budget that reasonably accounts for all expenses. Companies often seek help from professional accountants and debt counselors to chalk out a workable budget that can help them save more.

Next, start by collating the small and medium debts that bear high rates of interest. Also, do not seek out new loans unless your business needs it. The trick is to stick to the absolute minimum loan amounts at all times. Do not become tempted by big loan amounts to fund inventory expansions and stock updates. Finding a loan is not the success. It is just a way towards business success. Appropriate debt counseling and debt consolidation services often help in the management of several debts of varying APRs. Debt Consolidation services from non-profit organizations can help your business too. Check out NationalDebtRelief.com for more information on debt relief services for all kinds of companies in need.

Debt consolidation can help you –
  • Reduce the monthly payments by a significant amount
  • Reduce the recurring interest rates on short-term loans
  • Get the annoying creditors off your back by helping you pay on time
  • Reduce the number of monthly payments to just one
  • Reduce the APR to decrease outflow of cash from the business coffers
Have you spent too much on marketing?

Many entrepreneurs rely on small and medium loans to give their marketing campaigns shape. It is the era of innovation and new age marketing. Today, marketing efforts can cost more than a small to medium sized company’s monthly revenue. Yet, very few of these marketing strategies yield concrete results. The ROI from marketing campaigns, even in the days of digital marketing, is very uncertain. Experts often tell businesses to refrain from taking out big loans from private lenders and unsecured loans from online platforms for marketing and advertising purposes. Nonetheless, several small and medium companies resort to high interest, short-term loans in the hopes of high returns from marketing.

If you identify with the situation here, there is no need to panic. Most debt consolidation loan companies do not assess business credit scores, and they do not want to know why your marketing efforts failed. You can use the consolidation loan to pay off your outstanding debts to different creditors. A good business debt consolidation company gives you the liberty to find your own way to business success after you get the loan amount. Clearing the payments of merchant cash advance companies is one of the better things you can do right away with the help of the new loan amount.

Are all debt consolidation loan companies alike?

You should always check a few facts before you set out for getting a business debt consolidation loan –

  1. Your loan amount should cover the entire consolidated debt amount.
  2. If you want to invest in a new project, your consolidation loan amount should cover that too.
  • The loan company should be reputed.
  1. The company should not charge you excess fees at every step.
  2. The new monthly payment amount, including the interest, should be lower than the existing total monthly payment.

Typically, debt consolidation loan companies only charge an origination fee or a processing fee. It is a fixed percentage of the entire amount. It is a one-time payment, and it usually does not precede other recurring charges or penalties. The payments to the business loan consolidation company start after a scheduled period. It can be four months after the granting date or even six months. However, it is always wiser to stick to a shorter repayment period. You can choose to repay your loan over three years or six years, but a more extended repayment period automatically entails a higher cumulative payment. Although the monthly payments for a 6-year long period would be much lower, at the end of the term, you would end up paying a lot more than you would have after the end of a three year period.

Working with a new company just because it is offering incredible rates can be a risky decision. In most cases, new companies often offer “impossible” rates and terms, because that is what they are – impossible. To get the best debt counseling and debt consolidation loan offers, always work with recognized companies of repute.

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