You've got your business off the ground. You are starting to grow your customer base and generate regular revenue. This is where you always knew you would get, and now you are ready to take off. There is just one little problem: as you built up and got ready, you had to take out loans with less than favorable terms, so your high interest loan payments are eating into what should be your profit margin.
If this describes the current state of your business, you are not alone. Businesses struggle every day to overcome loan payments to reach healthy profits. Fortunately, there are ways to move forward and improve your financial picture. If you feel trapped under the weight of your current loans, we can help. Whether you are renegotiating individual loans or getting a business loan consolidation, Kenmore Capital can help you emerge stronger and more financially sound.
Revisit Your Budget
Before you look to a business loan consolidation or apply for new loans, you need to take the time to understand where you are. Collect all of your payment obligations and line them up against your weekly and monthly revenues. Chances are, your expectations in one or both of these areas have changed since you last charted everything out. Look at what falls to your bottom line after everything has been paid.
From there, consider what you can afford. Planning out a way to pay down principal balances faster is a wonderful exercise that helps you see the light of freedom at the end of your high interest tunnel. Make sure that in doing so you are not cutting your margins so close that a slow week or month would break you.
If you don't see a path to do this, that also helps, because it lets you know that you need to look into some different options. Either way, the budgeting process can help you figure out what your next steps need to be. A clear picture of your financial present is critical to helping you plan for the financial future.
Renegotiate or Refinance Your Loans
So, what happens if your budget shows you that you can't afford your current loan package? One step you can take is to go to your lenders and see if they are willing to work with you. When you first took these loans on, the lenders took a risk on your ability to build out your business. Once you have done so, you can return with financials that may allow you to get better terms on each of your loans. If you can cut interest and reduce your monthly payment amounts, it can provide a lifeline for you as you seek to press forward.
If your current lenders are unwilling, you may be able to refinance. We work with flexible, reputable lenders every day who can take a look at your current loans and find ways to refinance for you. You pay off your old loans with the new ones, and have more manageable payment terms. You may even be able to get an extra infusion of cash beyond the payoff amount.
Get a Business Loan Consolidation
Replacing individual loans with better ones can help immensely. For some, though, part of the problem is trying to juggle multiple loan payments across the month. This is where a business loan consolidation can give you a tremendous boost. One larger loan can give you a lower total monthly payment, with lower interest and the advantage of a single payment rather than spreading out multiple outlays over the month.
In addition to the advantages over your current loan, a business loan consolidation may give you an additional influx of cash, or the advantage of a wait before you begin repaying on the consolidation. Either of these serves as an immediate boost to your bottom line for that month, the equivalent of a large cash infusion at a time you need it most.
One Size Does Not Fit All
Any of these financial solutions can help, but finding the right one for you requires more than just plugging in a formula or giving you stock solutions to individual problems. At Kenmore Capital, we take the time to learn about your business to understand what issues you face, and then help you identify and implement the best approach for your needs. Every business faces financial concerns at some point; we are here to help you with yours. Contact us today to learn more about how we can help you get out from under your high interest loans.