About two years ago I left a job with an engineering firm that kept me well paid and subsequently allowed my credit rating to soar to around 870. I left the position to start my own photography business. Foolishly, I used personal credit cards to purchase most of my equipment, computers, etc... With the combination of lower income and ever increasing debt I've gone and maxed out 5, high interest credit accounts to the tune of about $18,000. Add in my low interest student loan and the grand total of my debt exceeds $30,000. I'm 29 years old.
I'm attempting to get my ducks in a row in order to pay down this debt as efficiently as possible without further damaging my credit score and hopefully without taking on more debt.
I'm wondering if I have any options open to me since so much of my debt was incurred for asset purchases for my business (which is now an LLC)? I've had a difficult time finding information on business loans for debt reduction and am afraid my credit is so poor now that I wouldn't be able to qualify in the first place.
Are any of you small business owners that have dealt with this?
Thanks in advance for your time and knowledge.
Paying Off Business Debt on Personal Cards
1 reply to this topic
Posted 09 January 2012 - 03:41 AM
I'm not a business owner, but my impression is that with as hard as it is to get a business loan (and then usually at higher rates), it is unlikely you will be able to get a business loan for the purpose of paying off debt taken out in your own name, unless your business has outstanding financials. Even then, many business loans require a personal guarantee, meaning if the business fails to pay, you personally take on the responsibilty of paying the loan. It can't hurt to check with local business bankers and see if they say otherwise, though.
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