Balancing a company’s financial structure is very crucial to the growth of the profits. This of course includes debts which are usually from loans to develop the business. They are sometimes necessary to keep the business moving but can be detrimental if they are not carefully tracked.
All companies both large and small should have a scheduled debt review to ensure that the company is not losing money on debt expenses. It is also an opportunity to reconsider the agreements made with lenders. This is because the needs of your business may have changed drastically over time.
The debt review lets you know how strong your loan portfolio is and if you can get better deals in terms of borrowing. It is not something to be ashamed of as it helps avoid the negative side of unchecked debts.
A credit counselor provides the services of the review and ensures you follow the appropriate process to debt freedom. They are legally empowered to help assess the best way to help you pay off the current debt and the ways you can benefit from the loans you get.
Once the debt review is done, you will know whether to restructure the loan portfolio and seek lower interest rates, longer credit durations and other government incentives. These considerations could change your business cash flow in the next financial year and enable you to grow your business without worrying about the lenders.
A Second Chance
In the past, it was very difficult for people with bad credit ratings to get loans from other lenders. This then leads to their quality of life deteriorating and even the businesses collapsing. The new Act allows those who have been blacklisted by credit companies to get a second chance and borrow money to build and grow their businesses.
Know Your Options
Business owners across the globe are in more expensive loan plans than they need to be in. A debt review helps you to seek other options and make better choices. You are likely to stick to one lender without the reviews and end up paying higher interest rates because you did not know there were better options.
When starting the business, there are limited loan options especially if the business does not qualify for the traditional bank loan. This will force you to seek other avenues which probably have higher interest rates. This is a worthy sacrifice since the business is running and you can now make better financial decisions with the help of a debt review.
Making the Move
Lenders might scare you into thinking your business will collapse if you move to a different financier. The truth is that a different financier will offer you the same loan with better interest rates and conditions. This means you still get the loan to expand your business. They may offer you better rates to convince you to stay but make sure you compare them with other lenders before accepting the deal. The better rates might also help you get your company out of debt in a shorter period of time.
Mark Robertson is an experienced credit counselor who has helped many companies organize their debt and settle with lending institutions. To know more about business debt review get on-line and have live chat conversations.