Many who become small business owners feel that business debt is a necessary evil. This does not have to be the case. While the US economy may be on life support, you’re business does not have to face the same fate. There is debt relief that is being made available to small business owners.
What exactly is small business debt relief? The term loosely means help to keep small businesses in business. We all know that sometimes things have to be purchased to keep your company afloat. This may be inventory, marketing, payroll or other overhead expenses. With all of these things piling up on a business, it is easy to get in a bind with debt. Many business owners take the route of using credit cards to help finance their business expenses. This method is fine for small business owners that are not suffering from the aforementioned costs that companies obtain, but what about those that cannot afford to cover these expenses? There are some creditors out there that will allow you to consolidate these unsecured debts into one payment. This will allow you to keep your business up and running. However, you consider a few of the additional options listed below.
There are three ways in which you can handle your debts: debt consolidation, negotiation and bankruptcy. Debt consolidation is a loan to pay off all creditors at a lower interest rate. As mentioned earlier, you would make one payment instead of several. Negotiating debt can be very advantageous for small business owners. You may need to come up with collateral to make sure you honor your part of the deal. However this option allows you to come out with your credit pretty much in tact. Bankruptcy is your last option. You are clear of all your debt, but it casts a bad shadow over your credit and makes it virtually impossible to obtain any other credit. Many websites are available to help explain debt consolidation and debt negotiation; even bankruptcy for small business owners. Make sure you choice a site that is run by a non-for-profit organization, so that you receive unbiased help.
Another glimmer of hope for small business owners is The Small Business Jobs & Credit Act of 2010. It is proposed to create a $30 billion fund to help small banks increase small-business lending and $12 billion in projected tax breaks. Although this may provide some glimmer of hope, it won’t fully resolve the issue. Overall, small businesses need customers and cash flow, not loans and credit cards.
So, to relieve your small business of debt, remember to satisfy creditors with a payment that you can afford, reduce your debt and stretch it out over time, and avoid bankruptcy if possible. The faster you reduce your small business debt, the sooner you will get relief and make profit for your company.