Business Debt Consolidation – is it the best option for me?
Just like individuals, businesses can find themselves in a precarious position when it comes to their debt. Credit card misuse, unexpected cash flow change or poor finance management are a few of the reasons that may have caused your company to have accumulated a substantial debt. Regardless of the reason for the accumulation of your business debt, getting rid of it is extremely important as it may eventually hurt your personal financial records. As a matter of fact, business debt management is such an integral task within your company – if you can afford it, you should employ someone whose sole purpose will be to manage the finances of your firm.
How do I go about consolidating my business debts?
You have now realized that your business debt is substantial, you are no longer capable of respecting your debt repayment plan and you are overwhelmed by the calls of various creditors. If that is your reality, a business debt consolidation may be the best recourse. The first thing you need to do is educate yourself on the various options available. We have summarized a few alternatives to simplify your task:
- Commercial credit counseling: A commercial credit counselor helps you get back a grip on your finances by following a budget and the personal finance management techniques. Their role is also to assist the business organization in getting back in shape. They will assess your business state and evaluate your current financial standing. Based on their observations, they will most likely craft a frugal budget for you to follow and bring your debts under control. If they see that your debt amount is beyond your capability to repay, they may sign you up with a debt management program and help you in getting out of debt through single and affordable monthly payments.
- Debt consolidation loan: According to the Office of Consumer’s Affairs in Canada, the debtor has to calculate the total debt amount that he owes before meeting the loan officer who is supposed to give him the debt consolidation loan. As a business owner, it is imperative for you to shop around in order to get a loan that best suits your needs and purposes.
- Business debt settlement: If you feel that you do not have enough funds and it will be impossible for you to repay your debt obligations, you can opt for a business debt settlement. A portion of debts will be forgiven by the lenders and you have to repay an amount that is much less than what you actually owe on your accounts.
As an entrepreneur, you will always be faced with unexpected challenges and a substantial business debt could be one of them. Dealing with that issue could be terrifying but do not panic as there are ways to get out of that pickle. Do your homework, consult a qualified financial adviser and select the solution that will make your debt situation more manageable.
