Business Loan Consolidation
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There are many businesses out there that have multiple loans or lines of credit. We get many requests to consolidate these loans. There are times when that is a good idea and when it’s not. Every business needs working capital. Business loan consolidation is a great way to free up working capital by lowering your overall monthly payment. It simplifies your payments and lowers the amount of money coming out of the business to make those loan payments daily, weekly or monthly.
When to Consolidate
You consolidate when your working capital is getting eaten up by loan payments. Sometimes business owners get caught up in the fact that they have so much access to cash. When that happens some business owners tend to take multiple loans to pay bills, buy inventory or complete projects. Then they realize how much working capital is going toward making multiple loan payments and they need a reprieve. The best way to do that of course is by lowering the payments. The only way to lower payments without being considered a default is by consolidating them into one loan.
How to Consolidate Your Loans
The way to get your business loans consolidated is by paying off all of the outstanding balances with a new loan. The new business loan will have a longer term than any of your current loans. It will also be written for an amount that will pay off your current balances as well as netting you capital.
Example:
Your current loan payments are $100.00 a day, $150.00 a day and $200.00 a day totaling $450.00 a day.
Your current balances are $5,000.00, $10,000.00 and $15,000.00 totaling $30,000.00
Your consolidation loan is for $60,000 at a longer term with a daily payment of $295.00.
This consolidation loan would net you $30,000.00 and lower your payments by $3,255.00 a month.
You can see how loan consolidation can really help your business. There are many merchant funding options available to business owners today. The best thing to do is talk to a business loan broker or funding advisor about your current financial status and see if loan consolidation is right for you.
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About the Author
Advance Smart is Connecticut's largest business loan firm. We offer every form of business lending available to the public. If you have questions feel free to visit www.advancesmart.com or give us a call at 855.BIZ.SMART Thank you very much.
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