With $15 trillion of debt in the United States, it’s no wonder that the debt consolidation industry is booming. You’ve probably heard about people consolidating consumer debt, but businesses have the opportunity to do the same.
The financial industry has plenty of programs for companies that want to reshuffle the deck and get some financial relief. It’s important that you do your research so you can explore your options.
Here are some key tips you need to understand about consolidating business debt.
Understand Why Companies Consolidate Debt
Before anything, you should learn how debt consolidation works and why it’s a useful option.
Your business likely holds accumulated debt in numerous areas. This might include past-due property tax, company credit cards, company car note, the mortgage on the office, and other debts.
It’s easy to feel in over your head with so many creditors to answer to. Debt consolidation companies combine multiple accounts so that you can pay off all your debts in one place. The debt consolidation company pays off your debts to these companies in exchange for a private loan through them.
These loans have helped a lot of companies get back on track. About 82% of business failures happen because of a lack of cash flow. Others mismanage resources because they struggle to get organized.
Debt consolidation can offer a helpful kickstart toward making changes.
Audit Your Business Finances
Take a fresh look at your books. Uncover all of your assets and liabilities, and document every bit of debt that you owe. Furnish copies of your company’s financial situation so that your debt consolidation professional has all the information they need.
Pull all of your old tax returns, utility records, and documents for any building projects. Make sure to outline any property that you own.
Check here for some accounting tools that might help you out during the audit:
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Speak to Debt Consolidation Pros
It’s important that you get help from reputable debt consolidation pros. Search the Better Business Bureau (BBB) to find companies with a high grade and a strong bond rating.
Consider the total debt that you have accumulated and compare it to the cost and rates of the loan. Forward the debt consolidation loan contract to your business lawyer and have them read through every line item until you have a complete understanding.
Get some referrals from the debt consolidation company so that you’re working with highly recommended professionals.
Move Forward With Solutions
It’s important that you honor your debt consolidation loan so that you can climb out of the hole. Choose terms that are reasonable and that give you plenty of time to comfortably pay it off.
Pivot from the debt consolidation loan with a plan to bounce back. Put together a solid accounting team so that you never fall into previous financial mistakes. Develop a plan to mitigate debt in the future and pay off your debt consolidation loan in a reasonable time frame.
Look Into Consolidating Business Debt
Consolidating business debt can be a game-changer for your company. Do your due diligence by going through your records to get to the root of the problem. From there, a debt consolidation pro can offer you a great deal.
Explore your options and check back for more business and financial advice.