Debt restructuring for start-ups must be carefully considered. The savings effects of a debt restructuring measure are by no means guaranteed. A bank loan is not always an option for attempting rescheduling. Other alternatives to finance must therefore be considered. The focus of one’s own considerations should be the financing costs for the loan. More exposition at http://kayserihbr.com/best-loan-consolidation-offers-get-credit-consolidation-loan-help-today/
Debt restructuring for start-ups – problem
Debt restructuring for start-ups can be interesting from various aspects. Often it is pressing liquidity problems that make additional financial scope seem necessary. Another reason can be an increased capital requirement for new investments. The range of possible good reasons is long. Most start-ups consider self-employment in the second or third year of debt restructuring.
Nevertheless, after starting a business, it should not be overlooked that it was hardly possible to withdraw the loans already granted. With extensive refinancing, the favorable business start-up conditions already in use are at risk.
A lender who is supposed to finance the debt restructuring in this phase can no longer easily reinsure himself with intrasavings bank. The credit conditions must therefore inevitably deteriorate. The cost of capital can more than double. The repayments already made are low. They rarely compensate for the increased additional financing costs.
Short-term liquidity can be realized without debt
A particularly common problem that has driven many self-employed people into bankruptcy is long payment terms. The entrepreneur uses his current account credit to bridge the period. Initially creeping, then increasingly the overdraft becomes permanent. As a result, up to 20 percent interest is due for overdraft peaks.
An interest burden that often exceeds the calculation profit. Debt restructuring for start-ups is not the solution to this problem, but the quick and inexpensive realization of outstanding debts. If possible, the payment terms should be reduced.
If this is not feasible, as with public clients, then the claim can be sold to a factoring company. Your commission gain is less than the discount rate. Dunning, another business problem, should be reduced. Anyone who does not pay after the second reminder will receive mail from a collection agency.
Personal loan for entrepreneurs
Following these measures, it is not uncommon for a significant shortfall to remain in the company’s current account. Partial debt restructuring makes sense in this context. It may also be necessary to mobilize capital for an existing investment backlog. Loan from private donors is one of the cheapest ways to mobilize new liquidity.
For example, a capital increase could create space for a silent participation. Low-interest programs of the state development bank intrasavings bank can be approved to finance the participation. With this option, a large amount of “fresh” liquidity can be generated.
On a smaller scale, various internet portals offer debt rescheduling for start-ups through personal loans.