If you are facing financial hardship in your business, you may find yourself in need of debt consolidation. Understanding what it is and how it works is the first step in the process. When you need money quickly, debt consolidation is often the best way to get it. You may find yourself needing it if you encounter an emergency with your business that you didn’t anticipate. Or you may find that you needed multiple loans to get your business started and now they all need to be paid back at once. The good news is that you have several options when it comes to consolidating business debt.
A traditional bank loan is always an option in this case. They may be difficult to qualify for, but if you do you’ likely pay less in fees and interest than you would with other types of loans. You also usually have more time to pay back a bank loan than other types. The average term for paying back a bank loan is up to 10 years. Though you’ll have to make monthly payments, the interest on them likely won’t be more than 10%.
Not everyone qualifies for a bank loan, and that’s ok. If you don’t, or simply don’t want to apply, another option is an SBA loan. However, it should be noted that you may face restrictions you wouldn’t with other types of loans. For multiple SBA loans, you will have to justify in writing why you need each one. Unlike a bank loan, you’ll generally have up to 25 years to pay this type off. Payments are still made monthly and you’ll still likely pay less than 10% in interest.
For more flexibility, consider using Funding Circle. This type of loan is best for small business debt. Since it’s an online lender, you won’t have as many restrictions to follow as with other types of loans. The process of applying for a Funding Circle loan is simple and you’ll receive an answer quickly. If you are approved, you’ll likely have the money within 72 hours.
For more information on business debt consolidation, please contact Park Cedar Commercial Lending.