Turn Debt Problems Into Opportunities

If you are feeling down about your financial outlook, but are anxious to start a business, you can turn your debt problems into business opportunities. I won’t blow smoke up your skirt and say it will be easy, but you can do it if you are smart and make the right moves.

Business opportunities always exist for those who are open to trying new things, but most business start ups require some amount of money. The old saying “you can’t make money without spending money” is usually true. So how do you get the money you need if you have debt problems? You need to take some important steps to ensure your best chance of success.

Know Where You Stand

It may seem like a no-brainer, but you might be surprised at how many people opt to not know the specifics about their financial situation. They know things are bad, but are afraid to look at credit reports and find out just how bad.

You might even find that your credit isn’t as bad as you thought it was. However, if you do find that your score is extremely low, you can only make the moves you need to correct problems by knowing what debt problems you have.

Know Exactly Where Your Money Goes

Besides your credit report, you need to examine your current spending habits in order to make room for business opportunities. If you don’t have an official budget, take the time to write down everything you spend on a monthly basis. This will give you an idea of your personal cash flow, and where you might be able to get some extra cash to start your business.

Pay Down Existing Debt

The fastest way to improve your credit score is to pay off debt. Do what you can to pay off each account with money you have discovered in your personal budget. Even if it is just a small amount of money each month, you can whittle away your debt slowly but surely.

Think like a Millionaire

After paying down your debt, and getting your credit score up, start thinking like a millionaire. Pay yourself a monthly amount that you put away and never touch. Look for high interest ways to invest safely while you are doing this so the money works harder for you. As you save you can look for ways to get loans as well now that your credit is cleared up, so that you can begin truly capitalizing on your business opportunities.

Small Business Start-Up Loans - A Great Aid for Start-Up Businesses

Small start-up businesses need loans more than owners of established businesses. For small enterprises, loan is required at almost every step of setting up the business. However, in most cases, small business owners find it difficult to obtain loans from conventional lending sources at reasonable rates. Start-up businesses in most cases cannot adequately fulfill the eligibility criteria set by banks and other conventional lenders.

Small Business Administration (SBA) is a government agency providing financial assistance to start-up businesses with the aim of improving the nation's economy. The small business start-up loans are not issued directly by the SBA to the borrowers. Instead, they work through their lending partners, including micro-lenders, community development organizations and private-sector lenders, who provide these loans to small businesses on the basis of the SBA terms and conditions.

SBA offers a wide variety of loans that cater to the financial requirements of different businesses. Let us discuss the various types of start-up business loans provided by SBA:

SBA 7(a): You can use an SBA 7 (a) loan for various purposes including:

• Purchasing machinery, furniture, equipment, fixtures, materials or supplies required for a business.
• Purchasing real estate including buildings and land.
• Establishing a new business or expanding an already established one.
• Meeting long-term working capital needs for paying accounts payable and operating expenses and also for purchasing inventory.
• Meeting short-term working capital needs such as contract performance, exporting, seasonal financing and construction financing.
• Constructing a new building or remodeling an already existing one.
• Refinancing an existing business debt.

There are various advantages of a 7 (a) loans over conventional loans such as:

• Easier eligibility criteria than conventional loans.
• Lower down payment rates on fixed assets.
• Longer maturity periods than conventional loans.

7 (a) loan amounts range from $350,000 to $3.5.

SBA 504: SBA 504 credit proceeds can be used for the following purposes:

• Purchasing real estate including land and already existing buildings.
• Constructing new facilities or renovating or remodeling already existing facilities.
• Purchasing equipment and machineries.

Like 7(a), the various advantages of SBA 504 include:

• Lower down payment rates on fixed rates.
• Extensive maturity periods than conventional loans.
• Easier eligibility criteria than traditional lends.

Loan amounts for SBA 504 starts from $350,000 and do not have any maximum limit.

SBA Express and Patriot Loans: These credits can be used for various purposes including:

• Purchasing inventory or vehicles.
• Meeting working capital needs.
• Purchasing equipment.

The advantages of these credits include:

• Easier eligibility criteria than conventional lends.
• Longer maturity periods than most conventional credits.

The loan amount of SBA express credits and Patriot lends range from $25,000 to $350,000.

It should be kept in mind that not all the banks providing SBA small business start-up lends offer the same SBA loan programs. In addition, the creadit requirements and the eligibility criteria for the borrowers may vary from bank to bank based on the bank policies and their individual terms and conditions.