You have an excellent business idea, but you don’t have the money to launch. You can’t borrow the money from anyone you know because times are tough right now. You tried crunching the numbers, but it’s not enough to sustain your business. You thought about applying for a personal or business loan, but you’re not sure you’ll get approved.
Many hopeful entrepreneurs find themselves in this situation. They have the passion and determination to start a business, they’ve done the necessary research, and they’re willing to roll up their sleeves to get the company off the ground. The only problem is, their unpleasant financial history makes it challenging to get the money they need to launch.
COVID Debt Consolidation
Financial agencies like COVID Debt Consolidation have been instrumental in helping people to turn their finances around. The company offers debt consolidation loans. These are low-interest loans used to consolidate unsecured debts like credit cards. Eligible applicants have the advantage of managing one monthly payment while saving money on late fees and interest. As long as they keep up their end of the bargain, debt consolidation turned out to be just the thing they needed to become business owners.
How does consolidating your credit card debt help you achieve your goal of starting a business? Let’s take a closer look at some of the advantages.
- Manageable Debt – Trying to keep up with multiple accounts is daunting. If you’re not great with bill management, it can cause you to miss payments. The more payments you miss, the worse your credit gets. Debt consolidation changes this. It’s one monthly payment that’s often more affordable than multiple credit card balances. It’s a lot harder to overlook and, therefore, reduces the chances of skipping a bill. Customers who used debt consolidation loans could keep up with the payments, thus improving their credit history.
- Saves Money – Most people don’t think twice about high-interest rate credit cards until their balances get out of hand. Trying to pay 26% or more on a high balance really adds up. It also makes it harder to pay down the principal balance and get out of debt. With a debt consolidation loan, however, things change. The loans are offered at a lower interest rate than credit cards, saving consumers hundreds of dollars. Not to mention, some people find that the monthly amount due on the consolidation loan is cheaper than their old credit card balances. The money that was saved in interest and monthly rates could then be put into a savings account to use for the business launch.
- Improved Credit – One of the biggest wins for entrepreneurs that used a debt consolidation loan is their improved credit. The loan covered the credit card balances, so you’re no longer getting negative ratings. The longer you pay the consolidation loan, the lower your debt to income ratio is. Lastly, making timely payments can give your score a boost. It didn’t take long before they were getting approved for small personal loans to launch their business.
- Less Stress – Entrepreneurs already have a lot on their plates to deal with. So, starting a business while juggling a pile of debt isn’t ideal. It can lead to heightened stress and pressure you don’t need. By obtaining a debt consolidation loan to reduce high-interest credit cards, they could go into their business without the financial burden.
No matter what kind of business you plan on starting, you need money. From registration and certifications to production and marketing, entrepreneurs are ultimately responsible for covering operational costs until their business generates cash. While there are solutions like lines of credit, personal and business loans to fund a startup, most entrepreneur hopefuls aren’t in the position to qualify. Ultimately, finding ways to manage debt and improve credit is the most effective way to find funding for a business. One option would be to consider debt consolidation loans. As you can see, with a bit of effort and discipline, you could be well on your way to launching the business of your dreams.