What an Entrepreneur Needs to Know about a Debt Management Service (cont.)
Contributed by Lisa Marie
After I utilized a debt management service, My credit was far worse than I had ever imagined it would be.
It seems as though our friends at these companies fail to tell you that the creditors are not usually thrilled with the idea, and still have the ability to report it as a negative mark on your credit report. When you get a copy of your credit report, it could say something like "Under credit counseling service" or "Under debt management". By all means, This is not a positive attribute to your credit, but a relatively sneaky way of your past creditors telling possible future creditors that you needed help paying off your debt.
Other alternatives to using debt management services
Many financial institutions will tell you that a majority of small business owners have gotten loans from their family members to start their own business. Small business loans are common for this purpose as well, although they can be kind of risky- your interest rates will definitely be higher and there is a lot more red tape to go through. Another option is to get a grant from the government, but again, there is a ton of red tape, and they can be few and far between.
The best bet- a home equity loan. You can deduct all of the interest paid on your taxes in April as well as all business expenses incurred through your new business.
