Business Loan Consolidation: The Basics
August 6, 2019
The old adage about spending money to make money is absolutely, positively true. Don’t believe it? Just ask any business owner in America how important funding is to their ability to make ends meet at the end of the month.
When you factor in unforeseen circumstances, a need for expansion, and all the other little incidentals that can happen while running a business, it’s not surprising that many business owners take on debt in order to stay afloat. Multiple loans and cash advances cause profit margins to shrink and pressure to pile on.
Business owners that feel the financial squeeze may feel like they’ve run out of options. Thankfully, loan consolidation is available to business owners who want to improve their cash flow and get out of debt
WHAT IS BUSINESS LOAN CONSOLIDATION?
Loan consolidation is the act of taking out a larger loan to pay off all the smaller debts that you have incurred. In most cases, the group offering the consolidation loan will do the legwork to pay off debts for the business as a part of their service.
Once the original debts are paid off, companies are left with a single loan that is paid off in simple monthly installments that are lower than what they were paying before. This frees up cash flow and improves profit margins greatly.
WHY CONSOLIDATE YOUR LOANS?
Loan consolidation is a decision that shouldn’t be taken lightly, even though it helps companies in most cases. The most common reasons why companies choose to consolidate debt is because it helps them get rid of high interest lines of credit, can help them get out of cash advances, and also reduce the amount they are paying every month.
DO I QUALIFY FOR BUSINESS LOAN CONSOLIDATION?
Though it is a great tool for entrepreneurs, the truth is the loan consolidation isn’t for everyone. You need to have more than one debt to consolidate, need to prove that you can pay off the loan, and also may be required to put down collateral in order to secure the loan. In some cases, bad credit can also disqualify applicants from consolidation.
WHAT KIND OF CONSOLIDATION LOANS ARE AVAILABLE?
There are several different types of loans that you can choose from, but what you will be able to obtain will hinge on where your business is located. Unsecured consolidation loans and similar services are only available in certain states. These loans often require excellent credit to obtain.
The most common option is a collateral-secured loan using real estate. The real estate used to secure the loan can be the entrepreneur’s own property or property owned by the company.
HOW CAN I LEARN MORE ABOUT LOAN CONSOLIDATION?
Glad you asked! The best way to learn about what loan consolidation programs are available to you is to talk to a professional business funding specialist from Leo Capital Group. Our job is to match you with the right funding solution for your business, and help you get to a better tomorrow.
Leo Capital Group is proud to say that our cash advances gained a reputation for excellence in the business community. They offered restaurants, bars, retailers, and other businesses the ability to stay afloat and even expand during tough times.
It’s important to understand the terms of any business agreement before you sign on the dotted line. To help educate our clients, we decided to offer this guide explaining what a cash advance is and how it works.