Debt consolidation is putting all your debts together and rolling them into one loan. In your journey of business set up and even eventually running the business, you may have had the need to access business loans to either start up or boost your business. There is a whole myriad of options, almost like a finance restaurant where an investor, sees what is on offer and get to make informed decisions on which product to go for.
Small business loans
They are relatively easy to get. There are micro finance institutions that have tailored their loan products to suit small and medium size enterprises. They offer quick business loans and requirements are relatively easy to meet. Some use the business as a collateral for the loan, therefore the business person does not strain very much getting securities.
Online small business loans
There are some apps that also offer online small business loans in a matter of minutes. If stuck and you urgently need some financing, these products come in handy as the loan application process is short. The flipside of these fast business loans is that the interest rates are often too high and they repayment period too short. This may in the long term affect performance of a business.
Major commercial banks too have loan products. They may not be quick business loans, as the application and approval process takes much longer than the app loans, but one is able to get bigger loans. You will find that there are other cheaper options for accessing small business loans. It is advisable to research on the interest rates and repayment period and if there is a cheaper option, it would be wise to consider business debt consolidation. When all the small business loans are consolidated into one, there is less pressure on the business person because they are only paying one loan at a more friendly rate and pace. They are then able to concentrate more on the business and its productivity.
In scientific studies, researchers have found that 29 percent of companies fail because they ran out of capital. A 2019 study showed that just 48 percent of small businesses have their current financing needs met. This means that about half of companies do not currently have the capital resources they need.
The right business loans can help companies achieve their short-term and long-term financing goals. In general, you will need to show your time in business, credit score and revenue when you apply for a business loan. Once your loan is funded, you can use it to support your company’s financing needs and long-term success.