In an uncertain world small and new businesses are really feeling the strain. Indeed, even some of the big boys have hit the road. Setting up a new business can put a serious financial strain on all your finances – Everything seems to be going out in the account books and comparatively little coming back in! Cash flows can be unpredictable and often expansion means new equipment. The old rule of thumb used to be, do not expect to start hitting a profit for at least a year: In today’s market that can be an even harder target to hit.
Is a Business Consolidation Loan Right for you?
Business debt consolidation can reduce your monthly outgoings and reduce interest rates and so ease the financial pressures on your new business venture: Literally, by putting all your loans into one and getting better terms like lower interest rates and even reducing the frequency of repayments. However, whether this is a good move for your business right now depends on the terms and conditions of any existing loans and current debt levels as well as your own, personal credit score.
Debt Consolidation or Refinancing?
While people use both of these to describe the same thing in reality they are quite different. Refinancing refers to when you take out a loan to pay an existing loan that has a higher interest rate. When you consolidate several loans are paid off with one loan. Sometimes, this might not be that the interest rate is lower – The simple fact that two loans are consolidated and by extending the payback time can reduce repayments and save your business.
Things to Consider
Interest rates are a big consideration. Even if you consolidate and extend the repayment period if the interest rate is extremely high you might be jumping from the frying pan into the fire! Do some research and get all your debts in front of you and look at the big picture. Speak to a reputable debt management consultant. Some offer free, clear and impartial advice in the first instance – They can help you make the right choice for your business. In some instances a it can be possible to reduce repayments by half or even more. They might also be able to get the interest and charges on overdue debts frozen or even reduced, as well as keep the creditors from your door. Without doubt, sooner is always better than later when it comes to debt.
If your business is currently struggling with cash flow problems make the move and consider consolidating or refinancing. Speak to a professional advisor as soon as possible. If your business has started to hit profit margins this can go a long way to getting reduced interest rates – rates you would not have gotten before when your business was starting up. Remember, better to move quickly before your credit is hit. Stop panicking and get started on your financial road to recovery – Contact a professional debt line company today.