When you operate a small office or home-based business, sooner or later you may be in the market for financing alternatives. If you need to establish lines of credit with banks and vendors, start by cleaning up your personal credit first.
Now that you are in business you may have come to the reality that the personal credit mistakes of your past do not magically fade away (Sorry, that is not one of the advantages to owning a business). Many entrepreneurs come face-to-face with this challenge when seeking capital from outside sources only to have personal credit to slow them down. In fact, one of the biggest credit issues that spills over from personal into business financial affairs is debt from student loans.
Steve Rhode, author with the Huffington Post recently published, How to Get Out of Student Loan Debt (you may want to read the points for yourself). One statement that Steve mentions that stood out for me is this:
Just because extended [student loan] repayment programs exist, that does not mean it is best for you to enroll in them.
This is worth noting because what it boils down to is most of these programs only serve as a band-aid to the real problem that exists — the habit of mismanaging credit obligations. Chances are that if you are not paying your student loan on time it is because the funds are simply not there.
Why? You may have dug yourself so deep in debt running a business, being underemployed, or failing to stay on top of the cash flow needs of the company, that paying off student loan debt is taking a back seat. So what’s it going to take to get on the right foot and get your credit tight, again? It starts with a change of mind.