Consolidating debt loan us
For example, instead of renting did you buy a home?Your home mortgage loan is a great way to build equity and live in a home of your own.Think of your debt as an overall part of your financial picture.Is your debt helping you increase your overall financial well-being?The chart below, taken from the NY Federal Reserve’s Regional Household Credit Snapshot shows the percent of consumers that have five different types of loans, as well as the average balance for those who do have loans.Remember, this does not include other bills and debt, such as medical debt.However, if you are building up a lot of personal debt, including credit card debt, then most likely you are either in a financial hardship, or mismanaging your finances.
And you may be eligible for a business debt consolidation loan at a lower interest rate, allowing you to make more manageable payments each month, with a greater percentage of your payments going toward the principal (the original borrowing amount) versus simply paying for the monthly interest accrued.
Ultimately, the goal of a business debt consolidation loan is to make your company's debt situation more manageable by reducing the amount of creditors you're dealing with as well as lowering the amount you pay daily or monthly (which improves your overall cash flow). If you think a business debt consolidation loan may be the right solution for your company's current debt situation, you can choose from a number of for-profit debt consolidation companies to broker your new loan.
If the new business debt consolidation loan agreement doesn't achieve both of those goals, it likely isn't a worthwhile solution for your situation. The consolidation company is responsible for negotiating the new loan on your behalf, collecting payments from your business and paying off your previous creditors.
You secure financing--through a few business credit cards and a small business loan, perhaps--that seems reasonable based on your expected revenue. You're making your loan payments, still turning a profit--but then, something happens.
Is a business debt consolidation loan right for me?