When a business starts up or tries to take the leap to the next level, they often take out business loans to finance growth. This could be for more equipment, parts, or to hire an employee. It’s so common, corporate debt has now reached $10 trillion.
You may be in the position where you took out debt and you realize that a lot of your resources are going towards past purchases. You should consider business debt consolidation to create one lower monthly payment instead of several higher payments.
Are you ready to learn more about how you can consolidate your business debt?
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Consolidation vs. Refinancing Business Debt
There are a lot of terms in the financial industry and it’s easy to get confused. People tend to use the terms refinancing and consolidation interchangeably, but they are two separate ways of dealing with debt.
Refinancing is creating a new loan or line of credit to pay off a loan that you already have. In this case, the new loan usually has a much lower interest rate than the loan you already have. That can lower your monthly payments and save money.
When you consolidate your business debt, you take multiple loans and other forms of debt and roll them into one loan. Instead of several payments to make for each loan, you have one simple payment.
You may or may not get a lower interest rate when you consolidate your debt. You’re likely to save money on the monthly payments.
Planning for Business Debt Consolidation
The first step in consolidating your business debt is to look at your personal credit history and credit score. Your goal is to get a lower interest rate, so you want to have your personal credit score be as high as possible.
Other factors in getting a lower interest rate include your business’ profitability, cash flow, and revenue projections. You may be asked to provide these statements to lenders.
How long have you been in business? Lenders want to make sure that your business isn’t going to go under. If you’ve been in business for a short period of time and you need to consolidate debt already, that would be looked at kindly.
You also want to look at the different loans that you have. Note the amount that you pay on each of them each month and the interest rate.
Look for Reputable Lenders
Your next step is to find a business debt consolidation lender. There are so many lenders that it can be hard to find the good from the bad. Not only that, but it’s up to you to take the time to do the research.
An easier option is to find a place that has done the work for you. Before you make a decision on debt consolidation, take a look at this debthunch.com offer. You fill out a form and you get several debt consolidation options from different lenders.
Business Debt Consolidation Can Save Money
If you find yourself spending a lot of money paying back several loans, business debt consolidation may be a smart choice.
In order to save money, you need to make sure that your business finances are sound and that you have a good personal credit score. It becomes much easier to consolidate your debt and save money that you can reinvest in your business.
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