Business & Finance

Debt consolidation loans: the life raft for businesses sinking in a sea of debts

Debt consolidation loans: the life raft for businesses sinking in a sea of debts
August 9th, 2017
Author: Guest Writer

What happens when fresh talent meets a business opportunity? Although we hope this would result in a brilliant and fruitful business venture, it rarely plays out that way.

More often, we see young entrepreneurs stuck in an impossible financial mess. Part of it comes from inexperience, and part of it originates from the negative impression we cultivate about loans and debt rescue services.

Most businesses that exist today have seen it all. No business’ run has been as smooth as we assume it to be. Most of the survivors today have once hit rock bottom and then resurfaced to lead the market. In fact, it is quite impossible to become a market leader unless you have painstakingly climbed the ladder of success. Many of these businesses have sought professional debt counseling and business loans before they saw success.

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Commercial debt counseling

This is the first step you should take if you identify with the situations mentioned above. If your brand values and company policies are suffocating under mountains of debt, go to a professional debt counselor. They offer good counseling services that will help you prioritize your loans.

Make sure you find one with credible performance history and an original client list. A sound financial advisor, cum debt counselor, will be able to pull your company out from under the surging debts. His company and team will guide you so that your firm can make a profit. This way, you will slowly clear the debts that you have gathered. This usually takes a bit of time to work. However, consulting a debt counselor is one-step we always recommend before our clients seek any other debt rescue aid.

Business consolidation loans

What do you do when you have multiple small and big loans scattered around the market? The most obvious next step is to consolidate them. You bring them together and see how much the debt amounts to. There are banks, companies and credit unions that will help you get funding to pay off your existing loans. You get a lump sum from the organization to pay off all your debts and even invest in new projects that will get you new sources of revenue.

If you are still wondering if we are telling a fairytale for people in business, then you should check out the latest reviews and research on consolidation loans and how they have helped millions of businesses around the world. It is very easy to get consolidation loan if you have been on the market for two or more years. If you have a clean and healthy credit history, that is a bonus. You will find it much easier to convince banks and credit unions to lend you the money.

What happens if you do not have a good credit history?

Needless to say, banks and credit unions will not be as ready. If you have a score below 600, it might even be quite impossible for you to get a consolidation loan from any registered bank. You can take the path most startups do. Opt for an online consolidation loan.

Online consolidation loans may seem a lot riskier than other options. However, they are as straightforward and safe as your land-based options. Here are a few things you should do to make sure you are dealing with a genuinely helpful lending company:

  • Check their website, blogs, and reviews
  • Check for reviews on business websites like Yelp
  • Check their client list and find out if the listings are right
  • Compare their interest rate with market rates

Once you are through this process, you can be sure that the company is legitimate like your regular bank or credit union.

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Why should you consolidate your loans?

Consolidating your loans should be the legitimate first option when you are dealing with multiple creditors. Usually, loans from various sources result in multiple monthly payments of varying interests and amounts. You need to make sure that the payments go through and your checks do not bounce. It is a huge hassle.

Once you assimilate your loans, you will be dealing with just one monthly payment. Most business loan consolidation companies have flat interest rates. Therefore, you will not be sitting down with your loan accounts every week to make sure that you have not missed any dues. This will also give you a clear idea of your expenses vs. your returns.

You can easily avoid worsening your credit record by getting your loans consolidation and getting a fresh loan to pay them off at one go.

This will help you get off the credit card treadmill. Credit card debts come with huge monthly interest rates. You possibly end up paying more for the benefit than the actual principal. When you get a consolidation loan, you can use the large amount to pay off all credit card loans at one go.

If you do not want such a big commitment at the start, you can only start with the credit card that commands the most interest rate. Then you can gradually move on to pay the other debts that are more amicable.

Will bad credit affect your consolidation loan rates?

Yes. It might not affect the readiness of the loan, but it will affect the interest rates you have to pay. If you have bad credit, any private lending agency will be risking more than usual by lending you the lump sum. In that case, they are likely to charge a higher interest rate. This is why you need to look around and window shop a bit before you make a decision.

A business consolidation loan is the life-saving raft for most companies in dire straits. If you are finding it difficult to deal with multiple loans and your accounts are showing financial stress, always remember, a consolidation loan is a smart and valid option for you.

Author Bio:

Isabella Rossellini is a financial advisor and blogger. She specializes in business finances and business rescue plans. She has her team of counselors who can help with Consolidating your loans before it is too late.

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