Information on consolidating your dept
But do these companies really do what they promise, and can they help your business?Here’s everything you should know before applying to take out a debt consolidation loan. During the start-up or growth stages of a small business many small business owners take on debt.Debt consolidation combines all of your debt into one loan. If you struggle remembering to make all your payments, now you only have one payment to worry about.Instead of owing money to multiple lenders, you owe to just one company and only have one monthly payment. And you can set up auto-withdrawals from your checking account and forget about it.The cons of debt consolidation first relate to your spending habits.It will not solve cash flow problems if your business is spending more than it makes in revenue.
Debt consolidation companies often target those with high balances, sending letters and calling with promises to lower your monthly payments and save you money.
Banks look at your leverage when deciding whether or not to lend, and it also impacts your credit score.
Leverage is the amount of your business that is financed by debt.
Check for Prepayment Penalties Before signing on the dotted line to consolidate your debt you should look into a few more things.
Some lenders charge a prepayment penalty on their loan products.