Most business owners will do anything to see their business succeed, even if it relies on personal debt. 25% of entrepreneurs use personal credit cards to fund their businesses. Whether you took a credit card, a loan, or did both to fund your business, you may wonder how you are going to settle the Debt-It is a fact if you have a struggling business.
Facts about small business debt
A higher percentage of small businesses are the backbone of a state’s economy. They offer employment in both the private and public sectors. Though being the root of the economy, it is surprising how they have failed for the last ten years. The main reason for its fall is financial instability and debt.
Debt isn’t bad though it can be damaging if you don’t have the right approach. Many business owners depend on loans to get their businesses afloat, buy inventory and equipment, start their businesses, and manage other expenses. Here is what happens:
- Most businesses use unsecured debt to fund their business start-ups and managing other financial situations in the business.
- Though having debt as a business owner is overwhelming, always remember that it’s common. an average business has the financing of up to $150000 in a small bank.
- Most businesses need financing aid, even though most investors use money from their pocket. The amount is not enough to meet their goals. To focus on their business goals, they approach lenders to get loans to expand their expenses.
- Credit card loans are attractive to business owners, as they are easy to acquire and have fewer restrictions. But its downfall is you incur high-interest rates.
Fortunately, there is a way out of the credit card debts and any other business-related debt without being bankrupt. It is known as business debt settlement. It is one way to help you handle your debt and save your money in about 20-48 months.
What is business Debt Settlement?
It is a process in which you work with your creditors to ensure you settle your debt for less than you owe them. Do not be surprised to know credit card companies and financial institutions often accept low payments on their debts; it is a matter of how you negotiate with them.
Many entrepreneurs will hire a debt settlement company to avoid the hectic process of negotiating with creditors. It’s because the debt settlement company employs professional negotiators that will help you strike a great deal that reduces your debt, saves your money, and be debt-free faster than continue dealing with minimum payments.
How Debt Settlement Works
If you choose a debt settlement company to work on your behalf, you will have to fill an online form for them to see if you qualify. You will then receive a call from one of the company’s representatives to explain their program.
Check out what happens when you enroll in a debt settlement program:
- Build: in your FDIC-insured savings accounts, you make monthly deposits that you control and own.
- Negotiate: after you have made enough savings in the account, here is where the debt settlement company comes in to negotiate with all your creditors on how to resolve your debt.
- Settle: after the debt settlement company and your creditors reach a consensus, the debt settlement company reaches out to you for approval.
- Freedom: the final step is being debt-free after paying the full statement amount to all your creditors.
The debt settlement company charges you a range of 15-25% fee depending on your debt. They only charge you after having a final agreement with your creditors and have signed it off. The fee they charge isn’t a big deal when compared to your business owner’s debt relief.
How Business Owners Qualify for Debt Settlement
Just like getting loans from creditors, not all business owners qualify for business debt settlement. Secured debt like company car loans and mortgages do not qualify for debt settlement. Tax debts and state student loan debt also do not qualify. The best way to know if you are eligible for a debt settlement program is by getting a debt evaluation from the debt settlement company. You can also tell if you qualify for debt settlement if:
- You are trying to settle your debt, or you are already behind on your payments.
- You got into debt because of financial hardships like job loss, taking a personal loan to keep your business going, or business collapse.
- You have unsecured debt of $7500 or more in your loan, credit card loan, or other debts not linked with collateral.
- If the debt enrolling is for your business, you are the business’s sole proprietor, and the debt is in your name.
Do not Handle Small Debts Alone
If you turned to any form of unsecured debit or credit card to keep your business afloat, you are not on your own. There are a thousand entrepreneurs out there who got into debt to make their business a success, and that’s why there are debt settlement programs that give business owners debt relief.
If you get into debt and find it hard to keep up with your payments, it is time to get help on your debt. Debt settlement companies like Freedom Debt Relief offers you a solution to get out of your debts faster while saving your cash. With one representative from the debt settlement company, you are assured of putting behind your debts and move to the next financial achievement.