If you are aspiring to be a small business owner, you know that financing a small business is no cakewalk. Your first and foremost duty is to know exactly how much is required to start a new business or expand your existing one.
How can you qualify for a loan to fund your startup business?
For a start-up business, it can be difficult to qualify for a loan. To get approval for a loan, you need to have a good credit score. So, get a credit report from all three credit bureaus. You are entitled to get a free credit report from annualcreditreport.com. Check your credit report thoroughly and if you find any discrepancy, ask for immediate rectification.
Now, if you have an existing business, first apply for a bank loan from traditional lending institutions.
Don’t feel disheartened if you fail to qualify for a loan from traditional lending institutions. Your next move should be searching for a Small Business Administration secured loan. However, for a Start-up business loan, you may need to have significant assets and capital.
Small Business Administration’s loan programs are there to provide you start-up capital. In case you fall short of qualifying for a bank loan, it can provide loan assistance to purchase commercial real estate as well.
You must consider a personal loan if you require only a small amount of money or have poor credit.
Apply for a line of credit at your bank if yours is an existing business in need of a flexible source of capital.
You can apply for a personal loan if you are in need of a small amount or you are not capable of availing any loan due to bad credit.
How to get out of business debt
If your business is in trouble with creditors and it almost seems hopeless to try to dig it out of debt, you must immediately opt for a small business debt relief plan. However, remember, business debt relief options and debt negotiation might be useful ways to avoid bankruptcy.
But avoiding scams and finding legitimate business debt relief companies can be a challenge.
How business debt relief plans work
Business debt relief plans usually aim at making the business owner debt free. The business owner can repay the outstanding debts by enrolling into a debt relief plan. This could be made possible by lowering the total monthly payments of or by eliminating a portion of the debtor by discharging all of the debts.
Business debt relief options
Debt restructuring is used by the business owners to make the repayment terms more favorable. As per debt restructuring, you can negotiate with your creditors to extend the repayment terms and to lower the monthly payment loads. With a business debt consolidation plan, you can assemble your endless debts and can pay them through a single payment gateway at a lower interest rate. Consolidating your debts can help you ease your monthly payment loads. Last but not the least, if you can no longer pay your bills, you can legally discharge your debts by declaring bankruptcy, provided there is no hope for your business to regain its financial footing.
What to consider to get out of business debt
Before deciding on which business debt relief option is suitable for you, you must scrutinize the reasons behind your debt problems. If it’s a result of start-up costs or one-time expenses that are no longer part of the business, then restructuring your debts should be your viable option. Nevertheless, if you find yourself relying on debt for everyday needs, get ready to make some serious changes in your business budget. If you find no other way to curtail your expenses or increase income quickly, file for the last resort, bankruptcy.
Review the authenticity of the debt relief company
With scammers mushrooming in the credit market, it’s not easy to find reliable debt relief companies. Make sure you shop around and compare the terms offered by different debt relief companies, before making a final choice. Attempt to locate a company with a solid track record, long client list and years of experience. The company should maintain a high level of transparency with its consumers and ensure that consumers’ interests are protected. Be certain you avoid working with companies, which make promises too good to be true.
Lastly, as the small business operates within a tight budget, business owners are often forced to take up loans for its expansion, development, and maintenance. However, they often fail to pay off the debts due to low profits and the current slump in the small business industry. Thus, it is important to save enough funds before starting a business. You can also make investments to grow your money fast. After that, you can start a business.