Saving With Business Debt Consolidation
Business Debt Consolidation – Does it Make Sense?
Have you been collecting debt for several years and now you don’t know how to get out from under it? Are you considering business debt consolidation? Having multiple business loans or alternative lending products with high-interest rates can really put a damper on your free cash flow.
Business debt consolidation is an option that allows you to combine several of your loan products into one large loan. Having multiple lending products without the ability to comfortably pay them back can be harmful to your personal credit score; as well as, the business’ credit score. Allowing your debt to grow can hurt your ability to get another loan product down the line when you are looking to enhance your business.
Loan stacking has become an issue in today’s small business world because the approval rates for traditional loan products with low-interest rates are so low. Businesses are being forced to take higher interest loans with a smaller balance, leading to additional loan products being created.
A large factor to being able to qualify for a bank loan in the future is the amount of debt your business carries. Banks will look into how you have handled debt in the past and if you have kept it in balance with your business’ profitability. Business debt consolidation can be a great option for a business to help refinance their loan products into a single monthly bill to pay. It will allow you to combine your loans into a new lower-interest loan. Having a single source to pay off will help a business focus on the task at hand, bringing down the total debt.
However, as a funding choice, it carries negatives with the positives. Knowing both is key to making an informed decision
Business Debt Consolidation—Pros
- Lower monthly payments
- Lower interest rates
- Single monthly payment
Business Debt Consolidation—Cons
- Spend more over time
- Because you are paying back one large bill vs. several smaller ones in a shorter period of time, the interest can sneak up on you.
- Debt can still grow
- Because you will have a lower monthly payment, you will have cash coming in you are not used to having. You have to be careful to be smart with you money. You can put it towards your principle payment on the loan or save it for the business’ needs.
- This is a band-aid for a bigger problem
- Remember that just because you can consolidate your debt into a lower monthly payment doesn’t mean that it will solve your problems. You must ask yourself, how did you acquire so much debt in the first place? That is the problem you must address while you pay down your debt.
But just like anything it is important to consider all of your options. Traditional business debt consolidation is not for everyone. Some businesses do not have enough debt for it to make sense. Others have too much debt that they can’t be approved. Depending on your level of debt there are different options out on the market for you.
Alternatives to Business Debt Consolidation
eBusiness Funding helps businesses that may struggle with traditional lenders. To do this, we provide merchant cash advances. These are accessible to a wider spread of businesses than bank loans or private lenders. 95% of businesses that meet our simple requirements qualify for funding. All you need is to be in business for at least six months, with over $10,000 in monthly revenue. With us, it’s not about past credit history or collateral, but about your business’s potential.
It’s important to us that you use the funds we offer in the most helpful way possible. As a result, so we place no limit on how you spend our advances. Payroll, expansion, repairs, spend on what you need! We also get you your funds fast, sometimes as soon as 72 hours after you first apply. Repayment is also very simple. Rather than large monthly payments, we take a set part of your future sales. This is set up by our skilled consultants. This percentage stays the same, so if business slows down, you pay less.
Interested? All it takes to begin is filling out a simple contact form. We’ll be waiting, and are looking forward to helping your business get the funding support it needs.