Business Debt Consolidations
Business debt consolidation enables financially strapped corporations and companies, that are unable to meet their current financial obligations, a way to get finances in order. Because the nature of selling goods can be feast or famine, sometimes a business may find itself behind on bills. Business debt consolidations are a tool to not only help a company avoid bankruptcy, but also help the company to become financially solvent again. "They shall not be ashamed in the evil time: and in the days of famine they shall be satisfied" (Psalm 37:19).
Consolidating does not involve a new additional loan, but rather it is a combining of the current overdue balances. With business debt consolidations, companies usually can lower their payments because the amount is stretched over a longer period of time. In addition, consolidating can lead to lower interest rates. Companies should consider business debt consolidation if they find themselves unable to meet their financial obligations, but when their debts mostly are current as well. If a company finds itself "robbing Peter to pay Paul," it may be time to consider consolidating.
A third party, either a for-profit company or a non-profit agency, takes part in consolidating. This third party, in turn, handles contacting the creditors, paying the outstanding bills, and managing the consolidated bills as the company pays it off. When looking for a company that assists with business debt consolidations, owners need to read the fine print to see what, if any, fees they charge, including any monthly or initial set-up charges. Most legitimate companies will not charge lofty fees, but will earn their pay based on the amount of money they are saving the client.
There are several advantages to consolidating. First, the annoying and troubling collection calls stop, which will free the owner up to concentrate on the company, and not just the company debt. Second, the company will receive a fresh start as business debt consolidation reduces, eliminates or restructures the amounts due. Third, the company assets will be safeguarded, as will be the owner's credit rating. Finally, with business debt consolidation the owner will prevent the company from having to file bankruptcy. Because a Chapter 11 bankruptcy will blemish one's credit report for up to 10 years, owners want to avoid it if possible. Consolidating, however, can help people maintain and even improve their credit rating as the company pays its balances on schedule.
While consolidating may seem like a great idea for one's company, it should be entered into with serious consideration. Business debt consolidations should not be used simply to reduce monthly payments in order to afford more credit. Instead, company owners need to take time to examine the underlying cause of why the business debt got beyond their control in the first place.
A debt consolidation business opportunity exists in the United States because of the number of Americans who are experiencing difficulties with managing their credit debts. Entrepreneurs who are interested in providing guidance to consumers who have incurred excessive debt might want to consider this option. The Internet has been instrumental in providing access to finding out more about such debt consolidation business opportunities. This is because these are usually Internet-based businesses.
It is usually marketing companies that offer such occasion. A debt consolidation business opportunity allows an individual to run the show from their home as an independent consultant and is based on the concept of network marketing and the development of a down line, multi-level marketing method of increasing profits. Network marketing is a one-person-to-another approach of introducing someone to a product or service. In multi-level marketing one develops a pyramid system by recruiting others to receive the same training, and then those members will in turn find still others who are interested.
There are many options out there so it is important to carefully review all debt consolidation business opportunities and pick the right one for the specific situation. What is working great for one person may not work at all for another person. God teaches His people to be patient and trust in Him. Psalm 73:28 says "But it is good for me to draw near to God: I have put my trust in the Lord GOD, that I may declare all thy works." Keep this verse close in order to have peace and hope for all of life's endeavors.
An individual pays an initial fee to become a member of a marketing company that has relationships with various financial institutions and must become a certified consultant. The new member pays for the classes provided through the marketing company that offers a debt consolidation business opportunity. The specialized training equips the individual with understanding and information that he or she must know in order to guide others about negotiation and/or settlement of excessive credit debts or past due taxes, or refinancing mortgages or student loans consolidation.
The new member frequently uses business cards to find clients who would be also attracted to similar openings. When serving as a debt consultant, the member uses the forms supplied online by the marketing company. Then the member assists their client with the paperwork that will be sent to the financial institution that works with companies that provide debt consolidation business opportunities. That institution will complete the transaction and the member will receive a referral fee.
For an additional monthly fee, the marketing company will provide individualized, ready-made web pages so the members can have their potential customers respond online to the invitation to find out more information about either debt resolutions through consolidation or about pursuing a job for themselves. Individuals should be cautious when evaluating debt consolidation business opportunities since a significant number of home-based business opportunities rely on questionable business practices and often the investment does not result in the purported profits promised through membership.
Bill Consolidation ServiceMr. Drowning in Debt finally called the bill consolidation service that his wife had been talking about for months. This service had been advertised on the man's local television station and it promised that interest rates would be cut, monthly payments cut in half and all it would take is a phone call or a mouse click to make it happen. For Mr. Drowning, the promises sounded like music that was sweeter than a Vivaldi concerto. Across the country and everywhere online a bill consolidation service, also known as a credit counseling service is available. In so many cases, a credit counseling service wears the non-profit moniker, but surprise, non-profits are allowed to make profits also. So Mr. Drowning in Debt made the phone call and scheduled an appointment downtown at a small and inauspicious office which housed one of the non-profit services in the area. Since the office was not extravagantly furnished and the non-profit caveat was firmly in view, Mr. Drowning felt comfortable that this was a place he could trust.
Lest a person get the wrong idea, bill consolidation service can really go two directions. One direction is an actual consolidation of all debts and one new loan takes their place. In most cases the new loan payment is quite a bit less than all the previous monthly bills put together. This approach works...well, not so much. For one thing, the new loan is typically going to be for a very long time, particularly if the consolidated bills added up to a large sum of money. Secondly, the interest on the new loan is going to be gigundo. The reason is because good old steady banks, the purveyors of cheap money, don't do consolidation of debt loans unless it is a home equity loan.
But then if Mr. Drowning had equity in his house, the man would have headed straight for the bank. But his credit is what the kids call whack, and so one new big loan was not what he wanted to do, and bless his heart, he made the right decision. For all the students in the class, here is a question. What do you think happens to an undisciplined borrower of money who gets his payments lowered with the new big bill consolidation service loan and now has some extra spending money every month? Duh. A new loan for that fishing boat will fit quite nicely into the monthly budget. And here we go again.
Whatever interest rates a person has with their credit cards and possibly some installment loans, a consolidation service loan interest rate will probably be at least 21 or 22 percent. And this percentage rate is paired up with a much larger credit amount meaning a ton of cost is associated with a bill consolidation service loan. Don't forget that most lending companies offering these all in one loans are funded by high risk investors who know that those who get this type of lending agreement are probably those who have not had a great track record in handling borrowing privileges. And the higher the risk, the more money a borrower will have to pay for borrowed money. Thus the profit usually outweighs any risk for the investor providing the loan money.
The other direction that bill consolidation service can go is the credit counseling route. Credit counseling may be a bit of a misnomer because credit counseling doesn't really put food on the table. While some credit counseling services do offer classes for the credit challenged, options that the client can do on his own are not readily discussed. Credit counseling is also interested in offering debt consolidation services but with a different twist. The fear of drowning in debt can sometimes almost be palpable but Jesus told us to be much more fearful of something else. "But I forewarn you whom ye shall fear: Fear him which after he hath killed hath power to cast into hell: yea, I say unto you, fear him." (Luke 12:5)
The bill consolidation service that credit counseling services offer is much cheaper than a large debt consolidation loan would be. Thousands of dollars less, in fact. Credit counseling services will negotiate with all of a client's creditors and get every account interest rate lowered substantially with the exception of federal loans and interest on owed taxes. The result will be a substantially lower monthly payment and all accounts can be paid off in five years if the client sticks with the program. Once one account is paid off, more money can be put on the next account and so on. The credit counseling services make about ten percent of the new consolidated monthly payment as their profit. It appears to be a pretty sweet deal.
Danger, danger Will Robinson! Bill consolidation service from a credit counseling service goes on a credit report as negatively as a Chapter 13 bankruptcy. Danger, danger! Statistics say that only thirty percent of credit counseling clients stay with the program until finished! The sad truth is that undisciplined consumers, when they have extra money in their pockets, don't have the will to put the money to wise use, either saving it or putting it on credit accounts for payoff. But there is a huge light at the end of the tunnel for those who want to go ahead and go the credit counseling route. All the things that a credit counseling service will do for the consumer can be done by the consumer himself; just go online and find out!