As a starting point for examining consolidating business & personal debt into one as a financial strategy- it is important to consider some factors that would determine whether it is possible, good or bad for the business.
To start off, how much money is left in the working capital when you consolidate the business and personal debt? Second, how willing are you to use this strategy to get out of debt?
The need to use debt consolidation as a debt relief is influenced by the availability of money to pay for the monthly repayment. Some business owners also find that the choices available to tap into this debt relief are limited because they do not qualify due to poor credit rating. Many wonder whether consolidating business and personal debt can offer a permanent solution to enhance personal and business financial security.
How much money is left?
When you consolidate your business and personal debt, take a look at the minimum monthly payment. Do you still have money to pay for other business obligations? Or, are you willing to part with your personal income just to save your business from falling? The amount left after deducting the monthly payment for your loan must cover the working capital, and your personal necessities. As the cost of living continues to increase, you also need enough money to make ends meet.
The Good
Rolling both your business and personal loan into one is good for business, if you know how to do it right. A wise entrepreneur sees consolidating debt as an opportunity to save money on interests, avoid harassing calls from debt collectors, and negotiate high interest loans with creditors. The convenience of paying only one loan per month, instead of multiple credit cards, utilities and other types of credit can be very confusing and stressful. The risks that you would miss your payment or underpayment are lessened and the benefits of having peace of mind are valuable benefits that they wouldn’t try to miss.
The Bad
Debt consolidation does not apply to everyone. Your business has no guarantees and so is your personal finance, especially if you don’t know how to manage your money wisely. Debt consolidation loan is still a loan and if you will not change the way you handle your finances, and you will still get into more debts, your finances will soon break down.
Consolidating business & personal debt – Possible
Traditional lenders will not mix business with pleasure—in a nutshell, you cannot consolidate your personal debts with your business loans. But, ALC Commercial offers business debt consolidation loans to help you pay for multiple debts, save from hefty interests, build an outstanding credit score and start with a clean and fresh debt slate. You can send in an enquiry to discuss your current personal debts and the specialists of ALC Commercial will advise you about the right loan products that would not only cover your multiple debts but your personal credits as well.
Want to know if consolidating business & personal debt into one is possible, good, or bad? Contact ALC Commercial today for more information.
