1. What to do if you are starting to accumulate debt
accumulate debts it is detrimental to both the financial health of your company and your personal health.
When a company or an individual experiences economic difficulties, the progressive borrowing it becomes a real threat, capable of destroying all the assets acquired.
Resort to alternative financing It is a valid and interesting option. Now, the benefit of converting your credit sales into cash sales must exceed the cost of these services. Otherwise, they will not solve your situation, but will make it worse.
As you can guess, contracting new debts to pay the previous ones generates an increase in interest, expenses and future obligations.
In fact, in most cases, it becomes a spiral of financial destruction very dangerous.
2. When getting into debt is no longer a solution
Si accumulate debts It has become a common practice, cut it short and try to stop it right away.
El progressive borrowing never solves anything. What seems at first the only applicable resource, soon turns into a nightmare from which it will be very difficult for you to get out.
Keep in mind that each financing requested has an additional cost. Not only are you going to have to return the requested capital, but also its interest, commissions and added expenses... That is, the over-indebtedness causes a snowball effect. The more you owe, the more you ask for and, consequently, the more you owe each time.
Furthermore, the circumstance occurs that this progressive borrowing makes you a customer with a high risk of Unpaid.
In consecuense, financing conditions are getting worse: the interests become very high, the returns are fixed in a very short term and the traditional bank, sooner rather than later, will paralyze the financing granted. Microloans, credit cards and other similar solutions end up entrenching your economic problems more.
Therefore, accumulate and accumulate debts it's financial suicide.
It will be a matter of time before the ball does not stop growing and gobbles you up financially without the possibility of overcoming it.
3. When should you borrow and when not?
We could summarize this advice like this:
Borrow to invest, earn money or obtain new assets, not to consume or to pay previous debts.
And, whenever you borrow to invest, do it with your head, carry out a good analysis of the operation and risk control.
Get this idea in your head and, if the right circumstances don't exist, look for alternatives. It is preferable to anticipate and mitigate an unpleasant ending than to persevere in it until it leads to a situation without a solution.
4. What to do if you are starting to accumulate debts?
At WorkCapital we like to be honest:
El progressive borrowing y el over-indebtedness They are not tasteful dishes or easy problems to solve.
The main thing is to have enough serenity to:
– Decide rationally, putting aside the natural emotionality that affects us in those moments.
– Carry out an objective and precise analysis of the economic and financial reality of the company.
– Use specialized professionals to identify the steps to follow and define an action plan.
– Detect the causes of economic bleeding and limit them as far as possible.
– Group debts as little as possible, seeking to mitigate interest and costs to be paid.
We detail the concrete actions that you should implement when you detect a over-indebtedness or an unstoppable trend towards progressive borrowing:
– Create a monthly budget, even weekly if necessary.
– Be very selective with expenses, dispense with superfluous expenses.
– Spend, consume and invest wisely.
– Spend time comparing offers to find the best prices without sacrificing quality.
– Identify and respect your borrowing capacity.
– Find a single credit provider to reunify debts and reduce expenses.
– Pay on time: delays are very costly.
– Create, apply and respect a financial survival plan. Unless you have knowledge on this subject, the support of qualified professionals is decisive.
– Look for financial alternatives and flee from the conventional.
La alternative financing can help you a lot and WorkCapital we are experts offer you best solutions to solve your financial problems as soon as possible.
Among our services, you will find the promissory note discount y the advance of invoices.
These alternatives will allow you to cover your treasury gaps and have working capital.
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