Debt Consolidation Loan and Bankruptcy Filing Options for Small-Scale Businesses

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One of the main reasons behind small businesses having dismal financial conditions is having more than one debt. The debts can range from bank loans to credit card debts. So, it is time you analyze the financial condition of your business or organization. If you have more than one debt and your business does not earn enough revenue to pay those loans off, then you are in a bad financial condition. One of the commonest debts is the credit card debt. When a credit card offers people or businesses, they enjoy various benefits from it. Initially, that seems like a solution which would turn out to be a big problem eventually.

The Process of Debt Consolidation

It definitely seems a better option to have one debt and low repayment rate instead of multiple debts, loads of repayment and no money at the end for making a business investment. To achieve this feat, you have to opt for debt consolidation. By choosing this option, you can restructure your repayment plan. It will be really helpful and convenient. In order to consolidate your loans, you have to find lenders who can provide you with a loan for debt consolidation. You cannot decide to go for debt consolidation just because you feel like it. There are many steps and some formalities.

All your creditors should agree upon this, and then you can have the facility. You can include both secured and unsecured loans for debt consolidation. For secured loans, you have to be more careful, because they are associated with collaterals. If you do not pay your installments on time, you may lose your property, though the interest rate will be low. Unsecured loans won’t have collaterals, but the interest rate will be higher.

Benefits of Debt Consolidation

There are some benefits of debt consolidation. Knowing about them will make your decision easier. The benefits are discussed in the following section and to know more, you can also choose to visit

  • You have to pay the installments to only one lender. So, it will be easier to keep track of the things. You can do the calculations easily too.
  • When all your debts are consolidated into one, you will have a lower interest rate. It will make the repayment procedure easier.
  • Because of the low repayment rate, you will be able to save money and improve your financial situation.
  • With this procedure, you can construct better and more effective loan repayment plan. If you follow your plan, getting out of the debt trap will become easier, smoother and faster.
  • Late payment of the fees and installments will be dealt with for once and for all.
  • You can choose a fixed interest rate. It will help you to pay the installment timely and save you a lot of hazards.
  • As you will reduce the amount of the debt, your credit ratings will improve. This will help you to get out of the unstable financial situation you were in.

Business Debt Settlement via Bankruptcy Filing

Are you preparing for bankruptcy filing? Well, if yes, then consider this article as a smart guide for you. For filing bankruptcy, your papers have to be well managed, and apart from that, you need a lawyer or financial advisor. You need to create some documentation so that your business bankruptcy claim becomes valid. Now you must be itching to know – what are those documents? Well, let us a have a look. If you can complete the complex procedure of means test, which measures potential business income and calculate if you are eligible for bankruptcy filing or not, then it will be sheer beneficial for you. This test is important, and if you can pass this, you may consider that half the job is done, even before filing the bankruptcy claim.

A record of business revenue statement is also required for bankruptcy claim. Now, in case if your earning statement is not legitimate, you may drown in deep trouble. Those, who do not possess a thorough financial statement, often are not considered eligible for a bankruptcy filing. Be truthful with your earning report and never conceal any sources of income. If your report or documents are well checked, your lawyer will do the rest to prove you as bankrupt. Another very important document is tax document. Your last year’s or current year’s document is required for filing bankruptcy. Those do not have any proper tax document, may find themselves in trouble. Keeping a record and mage your financial documents is necessary for any which ways. So, be organized with your documents or papers of finance.

Bankruptcy vs. Debt Consolidation Loan

Going for debt consolidation loan for paying off the business debt is more advantageous than choosing to file bankruptcy. Ideally, bankruptcy should be considered as the last stage of debt settlement. Once you have filed for bankruptcy, there is no coming back from that situation. Your business assets will be handed over the lenders so that they could be auctioned to fetch the debt amount that they owe from you. Bankruptcy is not good for the reputation of a commercial brand. This is the reason why you need to go for the debt settlement with debt consolidation through bank loans.

This is a hope to keep your business life and save your brand identity from the negative reputation. Buyers, as well as investors, would lose complete trust in the brand name. As result situations would turn even worse for the businesses. In such a scenario, it would be quite difficult to run the business. So, debt consolidation is always a good option as it gives the hope to bring back the business on track again. Small-scale businesses often suffer high inflation and poor debt planning. They should opt for debt consolidation instead of going for bankruptcy.


Dealing financial matters is always quite daunting for the business owners, though this is such a thing that you cannot ignore. When you are suffering from heavy overhead debt, you should plan your debt settlement carefully. The decision must involve a lot of thinking processes.

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