When you first decided to start your business, you knew your idea was great. However, you also knew you did not have much money to help you get started. As a result, you did what other entrepreneurs have done over the years, which is go in debt to get your business off the ground. Whether you took out loans or used your credit cards, you ultimately wound up owing thousands of dollars to various creditors. If times have now gotten tough due to COVID-19 or other financial issues, you may be concluding there is no way you can pay off your debts. However, when it comes to business debt, you may be surprised to learn there are more options than you imagined.
Business Debt Settlement
Since over 25% of business owners took out loans or used credit cards to start their businesses, it is not at all uncommon for some to eventually face problems associated with their debt. But rather than pursue options such as declaring bankruptcy or selling the business they love, more and more business owners are now opting for business debt settlement. In most of these situations, creditors are more eager than you think to make settlements on the debt owed to them, since they very often wind up with nothing if they choose to play hardball.
Why Work with a Debt Settlement Company?
If you choose to work with a debt settlement company, you’ll discover many advantages that will benefit you in the long and short-term. For starters, you’ll quickly gain peace of mind knowing your debt situation will be resolved by experienced professionals who will negotiate the best deal on your behalf. Also, you will know your debt problems will likely go away within 24-48 months, which will allow you to plan other areas of your business. Finally, you will be able to settle your debts for amounts far less than initially thought, which may help you keep more money and let you get your business back on solid ground.
Getting Started with a Debt Settlement Company
To get started with a debt settlement company, business owners usually go online to fill out a form to see if they qualify for such assistance. If it is determined you do qualify for this type of debt relief, you will then speak to a representative of the debt settlement company to learn about its services, fees, and other important areas. Once you give your okay and decide to partner with the company, you will then need to start depositing money into an FDIC-insured savings account you establish solely for this purpose. After you have the necessary money saved up, the debt settlement company then starts contacting your creditors and negotiating settlements. As agreements are reached, you are contacted by the debt settlement company for your approval, then money is transferred from your savings account to pay off the debts. In most cases, your total debt will be wiped out within four years.
Pay Attention to Fees
When choosing a debt settlement company to negotiate on your behalf, always make sure you choose one that is not only reputable, but also one that is very open about whatever fees they will charge you for using their services. With most debt settlement companies that work to settle business debt, the fees charged range from as low as 15% to as high as 25% of the total amount of your debt. While you may hesitate upon reading this, also know that no fees are ever charged until a settlement agreement has been reached with your creditors, and you have given your approval to the amount you will need to pay each creditor. Depending on the amount of debt you owe, paying these fees will still let you come out much better off than if you had tried to pay off your original debt amount.
What Qualifies for Debt Settlement?
If you are a business owner who is now facing thousands of dollars of debt, you must be sure that the type of debt you have does in fact qualify for debt settlement services. For example, while unsecured debts such as credit cards or personal loans do qualify for settlement services, secured loans such as mortgages or car loans do not. Also, any type of tax debt or federal student loan debt does not qualify. Should you desire debt settlement services, also remember that you must be the sole proprietor of your business, and the debt in question must also be solely in your name. If you have questions about this, make sure you get clarification from the debt settlement company prior to signing up for its services.
Don’t Deal with Creditors Alone
When you owe money to creditors, they always feel as if they have the upper hand. Whether it’s knowing your credit score will be ruined if you default on your debt or other reasons, most creditors will not take you seriously when you try to handle negotiations on your own. However, once you hire professional debt settlement negotiators to handle your situation, creditors are usually much more willing to accept less money to get the situation resolved.
Take the First Step
Rather than continue to worry about your business debt, take the first step today by contacting a debt settlement company to see if you qualify for such services. By doing so, you may soon find yourself debt-free.