Starting a business is not a big deal for people in recent times as there are many ways to get funds to start your business but the main thing which you should keep in mind before starting a new business is that you should not have any dues and should have cleared all your credits before you start a new business.
A debt can be of any type maybe a personal loan debt or a student loan debt but before you start a new business you should make sure that you have cleared all your debts on time.
But is it really important to clear the debt before you start a business?
As per the current scenario and laws there are no such rules that you should be debt free before starting a business but many big industrialists and business persons have said that before you start a new business make sure that you have no pending liability on your head which will deviate you from your main goal of this business.
The debt condition is not good if we see it from the eyes of a middle class or service class person. On an average, every service class person holds at least 1 credit card and a loan on his/her head (be it any loan) and it becomes cut to cut expenditure with these debts on head. Now if a service class person is planning for a business then the major reason which will stop him from doing that business is the ongoing debt.
Therefore if you already have 2-3 loans on your head and planning to start a new business by again taking a new loan then we will say a NO to it as taking another loan will just increase your problems because this time the loan will be for your business and not personal needs.
So if you dream to run a profitable business at the end of 4-5 months then it is always recommended to pay off all your pending loans and debts before starting a new business.
Now the main question comes in the scene…
How to clear up the credit or loan before starting a new business?
Obviously you can’t take a new loan to clear up your pending loan. If you have taken a student loan then plan to business only when you have cleared that student loan by doing a job and giving up all your time to clear that burden from your head as soon as possible because once you have cleared the loan then you can start your business from the very next day only.
- As per Transworld Systems Inc. (a debt collection agency) you should always look at your credit report before you do any more expenditure. You will always get at least 3 credit reports in a time period of 12 months from your credit taking company and therefore it is advised that you should always analyze your credit report thoroughly.
- Make sure that you do not cross any given deadline of paying your dues as these credit giving companies will put high charges on your on-going loan as a penalty. If you will ignore your payment deadlines then paying off your dues will become a dream to you and starting your new business too.
If you will keep only these two conditions in mind then also you can easily pay off your pending credit/loan within a given time frame and then you can surely start your new business as there will be no financial burden on you apart from the new business thing.