Can debt consolidation work for business debt?
If you’re like many Americans, part of your dream is to own and operate your own business. The problem with this, of course, is coming up with the money to launch. With business loans so hard to find, many new entrepreneurs have resorted to using credit cards and high interest loans to get started. While these loans can give you the capital you need to get started, they’re also next to impossible to pay off. At best, they can be a serious drain on your profits, while at worst they can ultimately sink your fledging business.
Because of this fear, many business owners turn to debt consolidation. Debt consolidation has helped millions of people with debt problems, but can it be used for a business? Almost always, the answer is yes. It’s important to figure out what kind of debt you have, however, in order to find the right loan.
If you have loans that are taken out under your name, it’s actually very easy to include them in a debt consolidation loan under your name. This is because lenders do not think of these loans as business loans, but rather as personal loans. Personal loans can almost always be included in a debt consolidation because the all of the loans are made out to the same borrower. The business’ finances do not have to be looked at or analyzed in order to get the loan; the consolidation process will focus only on you. It is important to tell your debt counselor that the loans were taken out to support a new business. This will help him or her to develop your future budget.
Loans that are under the business’ name or title are a little more complicated. Depending on exactly how these loans are written, it might be necessary to write a separate loan for the business. Most of the time, however, the business debt can be consolidated under your name because these loans are paid off. Frankly, the lender isn’t too concerned with how the debt gets paid off, and the lender of the consolidation loan is satisfied as long as the debt counselor can show that you will be able to make payments on the new loan.