Embracing a debt scenario is not an easy matter to deal with especially when you are dreaming of starting a new business venture. As per the statistics laid out by the New York Federal Reserve, you will find out that you are not the only one who is finding it exceptionally difficult to deal with a debt situation. There are outstanding student loans that stand around 1.3 trillion dollars along with the ever-evolving credit card debt. With such statistics on the paper, you will be glad to know that there are still successful startups flourishing in the market that have not given up the dreams of kick-starting their business venture.
Is There Any Scope for Financial Creativity?
While you might be finding it hard to attract investors who would be financing your business venture while you are already in debt, you will be encountering a lot of options such as angel investors, venture capitalists and other lenders as potential investors. Besides, according to entrepreneur.com, only eight percent of funding capital comes from traditional sources including banks, which calls for seeking funds from these sources. With that being said, here are some of the innovative methods to take control of your existing debt situation and secure funding for your upcoming business venture:
Take a Firm Hold of Your Debt Payments
The building block to your debt-free management scheme is to get your entire monthly due payments under control. In most of the cases, you will get a feeling where you will not be having monthly cash flows to develop and evolve your business idea. Needless to say, making your debt payments in a disciplined manner is necessary to ensure avoiding the late penalties; it will most likely consume everything that you have in hand. In order to ensure that you have a generous cash flow, consider working on various different strategies to lower your monthly debt payments.
Pay More than the Minimum Due
Irrespective of the type of debt you are facing, whether it is a personal loan, student loan or outstanding balances on your credit card, one of the ideal ways to pay them down is to make prompt payments in a higher amount than the minimum monthly payment. Not only this bold strategy will help you in saving a fortune over your loan interest, but it will also boost the debt payoff process to a great extent. However, make sure that you avoid all sorts of penalties and know all the terms and conditions prior to paying your loan faster.
Choose a Side Hustle
Dealing with your debts with methods such as prompt and larger monthly payments will boost the debt repayment procedure, but amplifying the money-making efforts will do more good for starting your venture. If you possess a talent or skill that you can monetize and magnify your monthly payments, take the effort and spend some time for it.
Pay Heed to the Debt Snowball Method
If you find yourself in the comfort zone to be able to pay more than the minimum monthly payments on your debts and credit card balances, you can consider leveraging the debt snowball method. It renders a unique way to boost the debt repayment procedure effectively and develop the momentum. The snowball method encourages you to pay off your small debts one by one and increasing the cash flow to pay off your larger debts with time. Snowball method will let you save your reserves for the largest loans until they are waived off completely and you can focus on your upcoming business venture.
Negotiate the Interest Rates on Your Credit Cards
In case you are having a hard time making headway on your balances due to incredible credit card interest rates, it is time to contact with your card issuer for negotiation. It is actually quite common requesting for a lower interest rate and if you have a good history of bill payment within the given time frame, there is a great probability of acquiring a lower rate of interest. Apart from credit card interest rates, there are other types of bills that can be generally negotiated and often be eliminated as well.
Opt for a Balance Transfer
When your credit card company is not negotiating on the interest rates, it might be wise to consider for a balance transfer. It also allows you to save a decent percentage of APR, only if you are paying the corresponding amount of balance transfer fee in order to enjoy the privilege. Also, consider the type of credit card you are utilizing for saving more money on balance transfer while paying off the money during the exact time frame.
Consider Debt Consolidation
Perhaps one of the most effective ways of debt management is to choose the option of debt consolidation, particularly when you are dealing with multiple debts. Besides, your credit card debt with incredible interest rates can be a huge problem when you are trying to focus on a new business venture. The best way to manage such a situation is to seek consultancy from firms like Nationaldebtrelief.com/. This will help you in getting a new loan equivalent to the sum of all your debts and provide you with a new monthly payment at a relatively lower rate of interest.
Cut Down Expensive Habits
Being in debt and finding it challenging to deal with the payment each month, analyzing your spending habits can turn out to be a great idea. Irrespective of your debt structure, it is always recommended to evaluate the small ways through which you are spending your funds every month. This will give you an idea regarding what purchases are sensible and where you can reduce the expenses. It will help you in identifying the key areas where you can minimize the expenses or might even get rid of them.
Finally, there is no point in getting disheartened or give up your dream of starting a new business venture due to your existing debts. You can still live your entrepreneurial dreams even if you have debt and go on growing a successful business.