Posted: Guest|August 29th, 2018

Debt Relief

Entrepreneurs: Learn Why a Debt-Filled Past Can Seriously Affect Your Growth Plans

Share:

Facebook Tweet mail
blog post author image
Written by Guest
Our goal, here at Best Company, is to provide you with honest, reliable information you need to find companies you can trust.

The average household debt has increased dramatically in the last three decades. With the cost of living on the rise, minimum wage stalled, and a cloud of uncertainty surrounding the job market, it's no wonder people are having trouble. Added to all of this, there's student debt. Based on figures from the Federal Reserve Bank of New York, the number of 25-year-olds with student debt shot up to 43 percent last year, up from 25 percent in 2003. Unlike mortgage debt and unpaid credit cards, even filing for bankruptcy in the US can't erase debt from student loans. Even if you've successfully paid off your debt, the ensuing negative credit can hinder many future ambitions and may prove an especially dramatic hindrance for those following the particular career path of an entrepreneur.

Why Personal Debt and Being an Entrepreneur Don't Mix

Whether you're jumping head-on into a new business or you're just starting up a side hustle, lining up funding for startups and unproven ideas isn't easy at the best of times. It becomes substantially more daunting when typical channels for loans and investments - such as banks and loan specialists - are shuttered by debt or bad credit. There are several "solutions" that you may hear about, but many are problematic at best and downright foolhardy at worst. Don't despair; there is always a way to get past debt and kickstart your new business. You've already taken the first step by researching your options. Your future as an entrepreneur could be just around the corner.

Be Wary of "Cure-All" Solutions

You may have heard about some special programs offering business financing to clients with poor credit. Like 0% financing on cars and homes for buyers with bad credit, these schemes are usually too good to be true. Following the financial crisis of 2007-2008, banks have clamped down on all types of credit, and there's a good reason why legitimate financial institutions will not offer traditional payday loans to people in debt. Loans for small companies have always been scarce, and are commonly only offered to proven entrepreneurs and established business professionals (unless the applicants have an outstanding financial status). Alternative borrowing schemes from smaller vendors usually come with exorbitant fees, interest, and additional risks. Read the fine print and have a financial adviser review these options with you, and you may quickly discover what doctors have professed for years: "cure-all" solutions rarely cure anything.

Looking to Friends and Family for Help

There are other forms of getting past debt and bad credit that are more legitimate. For example, if you're lucky you may be able to find a business partner or cosigner with good credit. If you take this route, be sure to have a lawyer review an agreement between the two of you, even if you know the cosigner well. You could also ask family and friends to formally invest, offering exceptional interest in consideration of their generosity and the added risk. However, finding anyone who is willing to overlook outstanding debt while funding your new business ventures will be difficult, at best. With these types of arrangements, also consider the dangerous potential for fallout in your personal life. The added emotional strain of working through personal debt and credit issues with added pressure from friends and colleagues is the last thing you need during the overwhelming process of launching a new business venture.

The Advantages of True Debt Relief

There's only one surefire way to avoid the psychological strain of involving close friends and relatives or the dangerous "fine print" that accompanies debt-friendly and low-credit loan schemes. True debt relief may take time, but it is time well spent if you want a long and prosperous career as an entrepreneur, with payoffs that will extend above and beyond the launch window of your first venture. Consider enlisting the aid of a debt relief specialist to get you back in the black and repair any damaged credit. Agencies in this area have years of expertise helping people like you. You might be turned off by upfront costs or perceived expense (depending on the service that is best for you), but remember that if you pick the right company to do business with they will have your best interests in mind. For settlements, they know that they only return a profit if you get out of debt. Compared to the alternatives, debt relief is almost always a better long-term option. Free from the strain of outstanding bills and bad credit, many doors will open up for you, including specialized loan programs for aspiring entrepreneurs. Back up plans are a must for small-business startups, and with a healthy financial status, you always have more options available.

Being an entrepreneur is one of the bravest, boldest, and most exciting career paths in the world. Don't quit before you've begun because of hang-ups with your personal finances. By seeking debt relief, you will soon be on your way to that crucial first loan and the spark of a brand new business.

See this post on Google+ and Facebook.

Compare the top ranked companies

Find the right company for you.

Freedom Debt Relief image #1
Pacific Debt Inc. image #2
Consolidated Credit image #3
Accredited Debt Relief image #4
SettleBankDebt.com image #5
Debt Rx image #6 View
More

Related Articles

Card image cap
4 Signs That Debt Relief Offer Is a Scam

Guest Post from Money Crashers Cash-strapped consumers staring at mounting credit card debt, student loans, and car paym...

Read More
Card image cap
How to Become Debt-Free in 4 Steps (2018 G...

Debt doesn't just disappear because we want it to go away. Many of us have friends and family who have lost jobs, been ...

Read More
Card image cap
Opening a Checking Account: Key Considerat...

Whether you're a small business owner with several employees or an army of one operating under an LLC with your name on...

Read More