There are going to be times when people have a great idea to start a business, but still have some financial baggage in their personal monetary history. The question that hits: is it possible to start a new business while being privately in debt? The answer is – it depends. But, at the very least, having a goal for the personal debt is a must before you get too far into the details of your new business venture.
So to begin looking at your options overall, consider things like debt consolidation, taking out personal loans, talking to the SBA, getting angel investors on board, and using crowdfunding and crowdsourcing as a modern resource.
Debt Consolidation
Before starting a new business, consider consolidating your debt from your previous adventures. These debts might be from school, or a car or home loan, or for any other number of reasons, but by at least having them all in the same place, you’ll be better organized to handle debt collection outside of your new business efforts. If you’re trying to appear responsible before getting a new start, debt consolidation will definitely help you with that.
Personal Loans
Another way to get rid of personal debt in an organized way is to take out some personal loans to handle them. And a sort of sideways way to do this that might even save you some cash with respect to interest rates is to open up a new credit card with 0 percent interest for a year or so. This way you can keep your personal debt in one place outside of your new business expenses.
Talking to the SBA
If you contact the Small Business Administration about your situation, they can help you as well. Not only will they give you good advice about business plans and business loans, they’ll also be able to tell you how other people have dealt with personal loans in the past. Simply hearing these stories may give you the extra info you need in order to get by.
Getting Angel Investors
How familiar are you with angel investors? If you have a good enough idea, they won’t even care about your personal debts – they will only be concerned with how much money you can make them by making your ideas come to life. These people are fairly difficult to impress, but if you do, then you’ll immediately see the benefits of their backing.
Crowdfunding and Crowdsourcing
And finally, to get around personal debt before starting a new business, you can always approach the situation from the perspective of crowdfunding and crowdsourcing. Because your new funds will come from new money, that means that you can deal with your prior debt on a separate timeline.
