3 Ways a Debt Consolidation Loans Can Help Your Business
If you are a business owner in this time of Covid, good for you. If you are keeping your head above water, you are doing better than Sears, AMC, all the restaurants in NYC, the Airlines, and the cruise ship industry. You should feel good about what you have accomplished.
That said, all businesses are a virus surge away from bankruptcy. Even if you do everything just right, you are going to probably need a little help to stay afloat. The big fear is that the second wave will hit as the holidays kick into gear. There will be family travel to spread the virus. And the cold weather is where the virus most wants to be. Worse yet, the second wave is going to hit before we are even done with the first wave.
You might have a plan for riding out the current storm. But have you come up with a plan for the second wave. If money is tight right now, where is the next round of money going to come from? It may be time to look into a consolidation loan. Here is how it can help:
It Can Increase Your Personal Cash Flow
Most small businesses are built from one person and a dream. Sometimes that dream is as modest as making enough to pay the bills and order a pizza from time to time. No matter how large or small your dream, you likely didn’t have a ton of venture capitalists throwing millions of dollars your way. Instead, you went for it yourself with whatever money you could scrape up based on your own good credit.
If your credit wasn’t very good, you had a problem that you likely have not yet resolved. That is where a company like Patriot Funding enters the picture. The reason you keep getting turned down for a right-sized business loan is that your personal finances are in shambles. You are carrying too much personal, high-interest debt. Your repayment potential is outweighed by your even higher potential for complete, financial collapse.
This is a problem, but not an intractable one. The first thing you have to do is reduce the amount of debt you have and increase the amount of money you can use to make payments. Your thousands of dollars of credit card debt at 27% interest is choking off your personal cash flow. You can ease the constriction with a consolidation loan that pays off all those debts and puts it into one bill that amounts to far less than you were paying before the consolidation. That is thanks to a much lower interest rate.
It Enables Other Methods of Financing
What are the chances of you qualifying for one of those American Express business cards with a high dollar credit limit? If your personal credit is bad, then your chances are not very good at all. A consolidation loan will do more than cut your monthly debt service. It can dramatically increase your credit score.
An increased credit score enables a whole new world of creative financing methods. One of those creative funding methods is investing. You might have enough to invest just based on what you save every month due to the consolidation loan. If you are not quite ready to try the market, you can invest the money back into your business. That improved cash flow will lend confidence to future investors in your business.
It Removes a Major Distraction
When creditors are calling you several times a day about unpaid bills, you can’t concentrate on anything. Even if you are making the payments, you are only a bad month away from declaring bankruptcy. There are good reasons why money problems cause marriage problems.
A right-sized consolidation loan can go a long way toward shrinking the money problems at home. That will allow you to give your business venture the attention and focus it needs.
A personal debt consolidation loan won’t solve all your business issues. You still need to make smart decisions and get a little luck along the way. But it can improve your credit worthiness, free up finances to improve cash flow, and remove a major distraction. That, plus the smart decisions you have already made could be just enough to navigate the pandemic and come out the other side stronger than ever.