Starting a business is what many people strive for, but if you’re drowning in debt, it can be hard to get the funding you need. Even if you’re planning on solely financing your venture, having large expenditures each month can slow down your progression. This is just one reason why it’s so important to pay down your existing debt — namely credit cards — before you jump headfirst into planning.
How Debt Hurts Funding Your Business
When it comes to funding your business, you have two options: fund it yourself, or seek investors. This depends on the type of company you’re starting and its estimated profitability. Regardless, you’ll want to have as little debt as possible. First, because you’ll need all the extra cash you can get to get up and running, and second because if you’re seeking investors, your personal debt can get in the way. They’ll view you as a liability rather than an investment possibility.
Plus, think about it: if you have little to no debt, you have more money to invest, theoretically.
The Dangers of Credit Cards
Credit cards are convenient tools to have in your wallet, but they’re also dangerous. Because the money doesn’t directly come out of your wallet they can be enticing to use for larger purchases you wouldn’t even consider using cash for without thinking about it.
High Interest Rates
One of the things that credit cards often come with is high interest. This means if you carry a balance, you’re paying interest each month. For some, if you pay just the minimum payment, you’re only scratching the surface of the balance itself. Doing a debt consolidation loan with a company like Braidwood Capital can help you cut back on the interest and pay off your credit cards for much less than you would to pay each one off individually.
This doesn’t mean you shouldn’t have a credit card, or two, but be smart about the ones you choose to carry in your wallet. They should have rewards — whether cashback or points you can redeem for travel, for instance. Make your spending work for you.
Finally, you should plan on being able to pay off the balance each month. Otherwise, you’re gaining interest, and credit cards aren’t known for their low interest rates, no matter how good your credit is.
How to Eliminate Debt
There are several ways you can eliminate debt. You can take on one of the famous debt methods such as the snowball plan, which tackles debts in order from the smallest to the largest. If you have a lot of debt and the interest is keeping you up at night, then you might want to consider a debt consolidation loan.
What Is a Debt Consolidation Loan?
This type of loan is meant solely to help you clear out your existing debt. Instead of paying varying interest rates and barely scratching the surface each month, the loan pays off all your cards. Then, you’re left with a single payment each month at a set interest rate. You’ll save up to a few hundred each month, depending on your debt level.
Is Braidwood Capital Worth the Hype?
Maybe the question you should be asking is whether or not getting yourself out of debt quicker, and for less money, is what you want. If the answer to that is yes, then Braidwood is definitely worth the hype. The loans are catered to your specific situation and everything is easy to track, including your payments and outlook.
Once you cut out the debt, you’ll be surprised at how much easier it is to focus on getting your business up and running. You’ll spend less time worrying about finances and more time thinking about the important details that can help you succeed. While you don’t need to be debt-free to start a business, it’s worth cleaning up your finances before you do.