Automotive Digital Marketing

Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders

Loading... Be Patient!

Mistakes You Need to Avoid When Consolidating Your Business Debts

Running a business successfully, especially in today's fierce competition, takes a lot more than just great ideas and smooth execution. Despite your best efforts, you may face losses and slow periods due to fluctuating market conditions, financial mismanagement and many other factors. If you are in a similar situation, while being burdened by debt, you may find it even more challenging to repay the different loans on time. The missed deadlines and constant creditor calls will also add to your stress.


Business debt consolidation is a practical solution that helps you restructure your debts by collating them into a single large loan bills. The primary advantage of consolidating multiple loans is that it enables business owners to manage their finances better, improve cash flow, and eventually add to their savings. Simultaneously, it helps to minimize administrative expenses and hassles, especially if you have to pay multiple creditors every month.


Common errors you need to avoid when approaching consolidation


Many business owners go into debt consolidation without knowing what it is all about. Their lack of knowledge of the process leads them to commit errors or form misconceptions that ultimately takes them away from the advantages. Here are few of those errors that you need to avoid for fruitful debt consolidation.


  • Signing up for a high-interest consolidation loan


In most cases, business debt consolidation brings with it reduced monthly loan repayment. However, low monthly payment does not necessarily mean that you will be spending less money once the loan is fully repaid. Availing a high-interest consolidation loan will mean that you will have to pay more money by the end of the repayment term. Hence, it is essential to ask the consolidation company about the interest rate.

  • Ignoring the core problem


Companies turn to consolidation when handling multiple debts becomes unbearable due to low cash flow, lack of proper financial management and other issues. However, most business owners fail to address the cause of the debt problem. Business owners can never hope to fix their financial problems in the long run without analyzing what caused the company to fall into the debt trap in the first place. 


  • Missing repayments and taking a new debt


Debt consolidation will only work if you keep up with timely repayment every month. Missing deadlines will not only accrue interest, but it will also attract penalties which will further damage your already shaky credit score. Another grave mistake that many businesses commit is taking out a new loan before clearing out the consolidation loan. Such practices only add to the debt burden and complicate the situation.


  • Failing to conduct ample research


Every financial decision needs to be made with precision. Opting for the first debt consolidation service provider is not a smart call. Business owners need to research on other companies and compare interest rates before signing up for a debt consolidation loan. 


No business owner wants to stay in a debt trap. Though debt consolidation is a viable solution, it requires thoughtful consideration and careful execution. By being aware and avoiding these debt consolidation mistakes, you can manage debts and business finances better!

Views: 45

Tags: Debt, money


Oops... You need to stop "Lurking" on ADM and become a more genuine Automotive Professional by completing your membership registration. As a registered ADM Member, you can post comments, publish your own articles (be a star!) and start Forum discussions. Stop being an online "Peeping Tom" and JOIN ADM RIGHT NOW!

Join Automotive Digital Marketing

Automotive Professional Network and Resource Exchange for Car Dealers, Managers, OEM and Marketing Practitioners seeking Best Practices.

ADM Sponsor

William B. Terry
Rated by Super Lawyers

loading ...

ADM Badge


Based On Your Interests...

ADM Consulting, LLC

Onsite/Offsite Combination ADM Consulting, LLC Professional Services
Select the maximum monthly investment you plan to make
Sign up for

Automotive Marketing Tools

Get ADM Toolbar

Click here to take the ADM Member Survey

Getting too many emails from ADM? Click mailbox below to control which types of alerts and updates you are sent......



ADM Professional Services
Phone Consultation
Topic or Issue:

Top Automotive Marketing Forum Discussions

Share the Best Content w/AutoMarketing Community

© 2020   Created by Ralph Paglia.   Powered by

ADM Badges  |  Report an Issue  |  Terms of Service