If you have taken some business loans for covering the costs of either starting your business or maintaining its growth, then there is nothing unusual. As per the statistics provided by the ‘Small Business Credit Survey’ about 64% of the total loan applicants were looking for funds for starting a new business or for expanding the existing one.
Whether you have utilized business credit cards, or small business loan, or even contacted investors, you required that sort of cash infusion initially to get your dream project going or to maintain the growth through the next phase. But what about these business debts if your business is going through a slow phase? Obviously, you cannot allow multiple debts to get accumulated.
You need to come up with a robust and a comprehensive debt repayment plan. The most frequently used strategy is none other than debt consolidation which is basically rolling multiple debts effectively into one single loan with a relatively lower interest rate. This way you could get debt relief in a much faster and seamless manner and at the same time, save substantial money due to the lower interest rate. Debt consolidation is the way to go about eliminating business debts. You may browse through debt consolidation reviews to get more valuable information.
Debt Consolidation May Not Be For Everybody
Debt consolidation would be working most effectively for high-interest loans like credit cards. As per experts, business owners whose income, as well as, expenses do not allow them to effectively resolve their existing debt issues using credit counseling or debt consolidation, must consider opting for bankruptcy.
Chalk Out a Realistic Budget
If you want debt consolidation for your business to show desired results, you must come up with a clear and effective strategy to attack. A basic budget would be allocating funds for debt repayments, emergency expenses, and contributions to your retirement savings. However smart budgeters would be taking into consideration occasional expenses like Jared J Davis vacation expenses, car registration fees etc. They would accommodate some scope for fun too.
Stop Using Your Cards
You must stay away from using your credit cards while you are paying down your previous loans through debt consolidation. Many people keep their credit cards locked away, some end up cutting up their credit cards etc. These are surely extreme measures that may not seem sensible but in fact, they could prove to be quite effective. Such strategies are referred to as “commitment devices”. They assist businesses in achieving their long-term objectives and aspirations.
However, you only need to keep your credit cards under lock and key but you do not require to close your accounts. You must pay a nominal fee on your card on time and in full every few months to keep your credit intact and your account active.
Conclusion: Seek Peer Support
People are ashamed of discussing debts but you could stay motivated by peer support and you should draw inspiration from peer groups to stay on top of your business debts. Several online forums, debt support groups, and family members could keep you focused and on the right path toward your goal of a debt-free existence.