If you are tired of answering calls from your creditors, and you can see no inflow of cash into your business you may start thinking about filing for bankruptcy. That is the last thing you should be doing if you want your business to turn back around. If you file for bankruptcy, you will most definitely have to wait for 10 more years until you can file for a loan. Therefore, bankruptcy is like the eulogy of a business that should be saved as the very last option.
In case you are stuck in a bad financial situation and you cannot find a way out, you should try debt consolidation meaning bringing all your payments, pending bills and debts under one larger amount that can be paid once every month at a fixed interest rate. Business debt consolidation usually comes with sessions of debt counselling and debt management.
How to know if you are in hands of a good agency?
A good debt consolidation agency will first try to negotiate with your creditors for low interest rates and monthly payments. However, they will also see that your credit score is not tarnished in the process. A debt consolidation company is completely different from a debt settlement company. The latter one is hugely responsible for plummeting credit scores and shaky relationships between lenders and creditors all over LA. So while approaching a company always make sure you are knocking at the right door.
Secured vs. Unsecured Consolidation Loans –
A good and reliable debt consolidation company usually needs some reassurance about the repayments before the loan is sanctioned. Therefore, if you do not have good credit scores, you may find it very difficult to get unsecured loans in LA. Unsecured business consolidation loans are those where you do not have to pledge any private property, real estate or deposit account against the loaned amount. Secured loans are more common and you can get them even when your score is around 500. Since they have the right to take over your pledged property, in case you fail to make the payments on time.
However, in either of the cases, you can rely on stable interest rates that are low and transparent. The interest rate can vary upon quite a few factors, including but not limited to –
- The duration of your business.
- The amount you are applying for.
- Your current credit score and credit history.
- Your recent profits and business activities.
- The term period you are applying for.
In each of the cases, the terms will be clearly mentioned to you. There usually no hidden charges when you are working with a national, recognized company. Many online consolidating companies charge processing fees at the beginning of the term period, but that is usually mentioned during the debt counselling sessions.
You must have heard the numerous horror stories about business debt consolidation loans. However, they only come to life if you stick to your old spending habits and bad financial decision-making.