The entrepreneur who never thought of getting another loan to pay off debts would throw the first stone. Similar to the beginning of the year, when many people make lists of what they want to do over the new period, this difficult time may be good for evaluating all the opportunities available, isn’t it?
For those who have debts, late payments, are paying the minimum amount of the credit card bill or entered the overdraft, every day is a good time to pay some debts and adjust the company’s debt structure.
Why pay off debts using loans?
This modality has numerous advantages:
Centralize the payments of several creditors in a single company;
Search for more attractive interest rates;
Improve your credit score;
Be the first step to obtain new financing for the purchase of goods, real estate or investment in production.
For those in debt, one of the first things to do is an inventory of debts and which ones deserve priority. And also planning how much will be spent over the next few months.
This process is called cash flow, which is a tool to manage your venture more effectively.
The text explains that the cash flow is used to monitor the inflows (cash and forward sales and receipt of duplicates) and cash outflows (cash and forward purchases, payments of duplicates, payment of expenses and other payments).
The idea here is to identify how much the company earns, how much it spends, what its profit, what it can cut from fixed or variable costs, but mainly what is the value of the installment that the company can pay, without compromising turnover or production your business.
It is also necessary to understand that there are different categories of debts, such as overdraft, credit card, payment from suppliers.
Still, it is necessary to know in which conditions it is worth taking a loan to pay them, whether to get a discount for paying in cash, to seek a redistribution, renegotiation of debts with lower rates, among other factors.
Loan to pay credit card debts
It is a fact that the revolving credit card has high-interest rates. According to Agência Brasil, “the average cost of the revolving bill for defaulting consumers ranged from 45.97% to 791.16% per year” in 2018. Before it was possible to roll over debts, paying only 15% of the invoice, which could mean a debt with exponential growth.
Aware of this market movement, aiming at greater rationality and trying to reduce indebtedness, as of 2017 the Capital Lender launched new rules for the credit card and allows the minimum bill to be paid in just one month. As of the second month, banks or financial institutions are obliged to offer another type of credit for the installment payment of credit card debt with cheaper interest rates.
Even so, using these pre-approved rates may not be a good deal, given that entrepreneurs and entrepreneurs often do not look at the amount of interest included in the amount.
The same logic can be applied to overdraft. A report from the UOL portal shows that basic overdraft rates are falling, given the lower Capital Lender rate. But the average value is still high, in the range of 13% per month. Personal loan rates, for example, fluctuate around 6.39% per month, which is less than half, making this option more suitable for the entrepreneur or entrepreneur.
Most of the time, it is more interesting to use a loan with a financial institution to seek more attractive interest, thus saving financial capital.
Anticipate receivables to pay debts
Another way to get the finances in order is to structure a receivables prepayment operation.
This type of credit allows you to organize your cash flow to keep your commitments up to date. In other words, it serves to advance revenue that will be obtained in the future, allowing credit sales to be transformed into cash in the account immediately.
This modality has a payment guarantee, has a lower risk of default and tends to have lower interest rates.
It can be the first step in balancing your finance department’s accounts and then taking out a loan.
Debt renegotiation or rescheduling.
When the entrepreneur has debts, it is always good to be proactive and try to face the problem soon.
Vanishing and not meeting creditors will not make the debt go away. Renegotiating debts or repaying may be a good alternative.
There are companies that have collections departments and can give you personalized service. If the entrepreneur has multiple debts, it is worth taking out a loan and renegotiating all at the same time. The idea is to centralize all debts in a single source.
It is worth remembering that it is always good to renegotiate everything in the most rational way possible. Analyzing the sources of credit is always important, especially for those looking for interest rates more consistent with their budget.