Entrepreneurs, owners & operators of restaurants and foodservice businesses need every advantage to contain costs, run day-to-day operations, market their business, differentiate themselves from the competition, draw in customers & deliver outstanding experiences in order to survive.
One thing that can often detract from the operations of a restaurant or foodservice business is a high debt load, which can rapidly eat into profits (no pun intended).
Managing significant debt in many businesses can become a second full-time job for small business owners, who should be focusing on the more important aspects of running a restaurant or similar venture. But it doesn’t have to be quite that bad, even if you’re not a financial pro.
The prolific amount of business debt advice, and sites telling you “how to get out of business debt” on the Internet are a testament to the interest in this topic, and the need for sound debt help for small business owners.
One of the best options to consider is a business debt consolidation loan, as it’s a cost-effective, cost-saving, quick, and easy way to address your debt load and make your life easier.
Below, we’ll address some aspects of business debt consolidation loans, including a deeper dive on how debt impacts restaurants, the basics of small business debt consolidation loans, a discussion of the pros and cons of debt consolidation for business owners, particularly those in foodservice businesses, and answer some common questions relating to business debt consolidation loans.
Finally, we’ll highlight the business debt consolidation loans available from BizFly Funding, one of the leading private small business lenders in the US today.
The Problem with a High Debt Load for Restaurant and Foodservice Businesses
As we touched on in our introduction to this topic, debt load can have a profound effect on tangible aspects of a restaurant or foodservice business operation.
It can also have many more subtle (and often more devastating) effects on things like morale, focus, attention, and where owners spend their time.
There really are a range of problems that can result, both in the present and in potential future scenarios, for small business owners struggling with debt.
The Basics of a Business Debt Consolidation Loan
Fortunately, there are solutions to this problem. One of the best is a business debt consolidation loan. Business debt consolidation loans are similar to ordinary loans, in that they give you an amount of cash up-front, and then you pay back the loan over time, with interest.
Where they differ is their intended purpose. Business debt consolidation loans are used to pay off multiple existing debts to their servicers, leaving you with a single debt – the small business debt consolidation loan – and a single servicer.
In many cases, business consolidation loans can also offer lower interest rates (depending on market conditions and other factors) than some or all of the existing debts you may be carrying. Business debt consolidation loans may be secured (requiring collateral) or unsecured.
Typically, the interest rates will be lower on secured loans, but they are a larger risk for the borrower. By contrast, unsecured loans have slightly higher interest rates, but no risk to the collateral of the borrower.
As a result, unsecured business debt consolidation loans are often the most-desirable for restaurant and foodservice business owners, and many small business owners in general. To use the business debt consolidation loan, you take the proceeds and pay down other existing debts.
To achieve the most savings, it’s best to start with the debts you have that have the highest interest rate – which often means credit cards. These debts are eliminated, effectively being transferred to the new, single debt consolidation loan, usually at a lower rate, too.
It doesn’t change your immediate outstanding debt balance, but does have numerous positive effects, as we’ll discuss in the next section.
Advantages of Business Debt Consolidation
There are numerous advantages and benefits to debt consolidation with a business debt consolidation loan. Some of these can be realized immediately, whereas others will accrue over a longer period of time.
Many of the key benefits revolve around saving you time, money, hassle, or all three.
Advantages and benefits include:
Limitations of Business Debt Consolidation and Business Debt Advice
Naturally, there are also some limitations to business debt consolidation loans, like any business debt advice or debt help for small business options.
These can include:
Business Debt Consolidation Loans from BizFly Funding
If you own a restaurant, foodservice business, or any kind of small business, and are looking for business debt consolidation loans, look no further than BizFly Funding.
BizFly Funding is a private, non-bank lender, based in the US, that deals exclusively with small business funding and financing. They offer numerous small business financing products, including business debt consolidation loans.
They’re not a debt consolidation or debt settlement company, so there are no absurd fees to be paid or negotiations to be had – simply high-quality, affordable small business debt consolidation loans and other funding products.
To learn more or start the application process, visit https://bizflyfunding.com.
Frequently Asked Questions about Business Debt Consolidation Loans
Many private lenders offer business debt consolidation loans, even for businesses that have poor credit scores.
Each case is unique, but the requirements for business debt consolidation at private lenders are usually easier to meet than those at banks.
Small business debt consolidation loans are not the same thing as engaging the services of a debt consolidation company.
However, the goal of both debt help for small business options is largely the same. With a loan, you take care of it yourself directly with your creditors.
Debt consolidation companies act as middlemen to handle all that, but need to get paid for their services, eating into any potential savings you can realize from the business debt consolidation process.
Debt consolidation for business owners, either through a business debt consolidation loan or debt consolidation company, does not attempt to settle your debt for less than it is worth.
It does not indicate you are financially distressed, but rather simply is a matter of bookkeeping and management of your debt, with every intention to fully repay it.
Debt settlement involves settling debt for less than the value on the books, and typically comes with hefty credit score penalties, lengthy negotiations, and high service fees for debt settlement companies.
Business debt consolidation loans can actually help improve your credit, by reducing your outstanding debt on various revolving facilities like lines of credit or credit cards, and paying off existing loans.
While it doesn’t decrease your total outstanding debt amount, it can boost your credit score based on what debts you have and pay off with the loan.
Of course, it can hurt your credit somewhat, as with any loan, if you fail to make the required repayments on time.
Unsecured business debt consolidation loans are usually the best choice for restaurants, foodservice businesses, and other small businesses.
They have a slightly higher interest rate than their secured counterparts, but don’t require you to risk valuable collateral.
Most business owners don’t want to risk their property, equipment, inventory, or other assets as collateral for the loan if they can avoid it, as it would be forfeit if loan repayment isn’t made.
With unsecured business debt consolidation loans, you don’t have to.