In this fast-paced and dynamic digital era, numerous tech startups are coming up and many of them are flourishing while some of them perish away. In this context, we understand that a tech startup is an organization whose objective is to introduce path-breaking technology products and solutions to the market. These organizations are known for delivering innovative and novel technology products and solutions or sometimes they are even involved in delivering existing technology services and products in new ways.
Several tech startups start with very modest investments; generally, the entrepreneur invests his own money to set up his tech startup. Technology and software business necessitates heavy financial investment. You would more often than not, require purchasing several licenses; employ the services of contractors and even employees. As per https://www.glassjacobson.com, around 90 percent of the startups are not successful. There are diverse reasons for this. You must be wondering how you could safeguard your startup from being a victim to a similar fate.
Often overwhelming debts bog down your business. It results in draining of funds that are already in short supply. Most startups need to make multiple monthly payments to different creditors with different interest rates and diverse premiums. Gradually the debts would be claiming more importance as compared to the actual running of the business. There is a remarkable shift in focus as a result of overpowering debts. Is there a way out of debts? Negotiating and bargaining with your creditors may impact your credit score adversely. Moreover, it does not help in dramatically reducing the rate of interest either.
Being Organized Is the Key
You must start prioritizing your payments and bills. It is pretty obvious that credit card companies generally charge exorbitant interest rates. You must stop using the costliest credit card at once. Try paying off at the earliest. You must also examine your utility bills. You should try saving a significant amount by cutting down the use of a desktop or a light. Try introducing an ‘Earth hour’ if necessary in your office. During this hour, employees would not be allowed to use any electrical appliances. Taxes and payrolls must be on top of your priority list on each and every occasion. You simply cannot get out of this financial mess without paying your taxes and payrolls. You may then collect and organize all your smaller bills. Often these would help you in filing tax returns. Simply by being a little more organized, your startup could save substantially every year.
Debt Consolidation Is the Way to Go
You are having the option of debt consolidation at your disposal so that your debts do not spiral out of your control. You must necessarily get a strong grip over the management, accounting, and overall administrative aspects of your startup. A fantastic way of getting out of the vicious cycle of debts is to outsource your debt worries straightaway to a reputable and trustworthy company. However, you need to fulfill certain eligibility criteria to get a debt consolidation loan approval.
What Do You Understand By Debt Consolidation?
Debts that are unplanned or those that accumulate in haste could be pretty expensive. If the business loan seems to be expensive and comes at an exorbitant interest rate, then you would have to pay higher monthly installment towards all those loans. Moreover, you could find it difficult to remember the due dates and deadlines of multiple loans. Under the circumstances, the best thing you could do is to opt for debt consolidation. You could take out a fresh and a bigger loan that would be helpful in paying off all your existing debts. For consolidating your debts, your business must necessarily be six months old at least. Moreover, your business must boast of a sound credit report and a high credit score of above 500 or even more. Your credit score must be acceptable if not very high. If you want to take out a debt consolidation loan you must demonstrate an annual turnaround.
Do Research the Existing Loan Terms
Some of your existing loans could be having certain hurdles that may prevent you from opting for a debt consolidation such as exorbitantly high penalties for prepayment. Most of you have an inclination toward consolidating all the loans with the highest rate of interest first. However, many entrepreneurs do not consider the cost associated with prepayment penalties or some other refinancing expenses into math. You need to know every aspect of your existing loan covenants.
Compare Your Existing Debt with a Debt Consolidation Loan
Once you have done substantial research and have all the necessary details, you could examine the possibility of consolidating your multiple existing debts. Check if debt consolidation could help you save some money in terms of the interest rate. Take all aspects of your existing debts and examine the features of a debt consolidation loan and then weigh the pros and cons. However, debt consolidation is often the best option if you presently have overpowering debts and you are constantly struggling to stay on top of your debts.
Identify the Debts You Wish to Consolidate
Maybe under the circumstances, you could consolidate just a few of your debts but not all. You must know precisely how much debt you would like to consolidate. You must identify the existing debts that you wish to consolidate and convert into a debt consolidation loan.
Determine if You Are Eligible for Debt Consolidation
The criteria for debt consolidation loan approval vary from one lender to another and they depend on the loan type. If you could fulfill these criteria or basic qualifications, you should be eligible for taking out a debt consolidation loan. Some of the qualifying factors include a credit score of 600 or even more, annual business revenues amounting to $100,000, or at least,
Gather All Mandatory Documentation
Once you are ready to consolidate your multiple debts, you must ensure that you are fully prepared to take the next step. You must organize all paperwork related to debt consolidation. Documentation must be flawless so that your debt consolidation process is not slowed down unnecessarily and is complete without any hiccups. Collect all necessary documents and information upfront for improving your loan approval chances,
Apply to Consolidate Loans
The very last step in consolidation for business loans is to draft an application after finding the right lender for your case. You should be working with a proactive, hands-on lender with a loan underwriting department determined to get your loan approved. They will ideally not force consolidation on you until they have explored all possible avenues regarding negotiation and restructuring of payments. There are online lenders who do an impressive job at this these days, and you can have a look at your pre-qualification status in a matter of minutes, following which they commit to handling all the administrative work in the process for you. Get in touch with NationaldebtRelief.com for perfect debt solutions.
The Advantages of Debt Consolidation Loans
Debt consolidation loans are a blessing when you are struggling to make ends meet with your loan payments. Repayment can become a whole ordeal due to the disparities in interest rates, minimal amounts, and urgency levels of each loan on your plate. Defaulting on credit payments severely affect your business’ credit history and your credit rating, thus reflecting very poorly on your prospects of landing any funding for your business in the future. A consolidated loan with a proper repayment plan is almost certainly the way to go. You will find yourself back on track and able to stay on top of all your balances and payments without issue when they have all been restructured into a single account with a lower interest rate, paid out over a longer tenure. Definitely, do your research to ensure a smooth transition.
Conclusion
Consolidation for business debt is a highly specialized case, and you should not be working with generic agencies for the same. Ideally, your consolidation agency will have worked with startups in the past and achieved success in getting them across the line. Look for genuine reviews and testimonials online as well as in your community. Another very solid option you should explore is debt counseling to assess your financial situation and figure out ways to get back on track. Getting out of debt is hard, but staying debt-free is even harder. It demands a ton of discipline and prudent decision making from you, and you will have to stay on your feet at all times.
