Published: 01/09/2022 By Hannah McCormack
Continuing with our series of blogs on informal options to consider over an official insolvency procedure; next up we look at Debt Consolidation.So far we have discussed informal arrangements with your creditors, and debt refinancing; next up is debt consolidation which is similar to debt refinancing.
If you have multiple loans the idea behind debt consolidation is to consolidate all the loans into one single loan with a view to reduce the overall monthly outgoings. Amalgamating all your loans into one single loan with a lower interest rate will help ease the monthly pressure to service multiple loans at different rates and terms. The new loan would be easier to budget for as it would ideally be an amount that was lower than what you were paying previously every month.
As with the limitations we set out for debt refinancing although a new loan may mean lower monthly payments it could also have a longer term or different less favourable loan conditions. Consolidating debt also only looks at your monthly outgoings and does not address any other aspects of the business that could do with a restructure. Ultimately seeking professional advice at this point would be highly beneficial, not only can you address your monthly outgoings but you could put into place better practices for the business as a whole in order to run smoother and be more successful in the future.
It's worth noting that in both refinancing and consolidating lenders sometimes may require additional security to be given in order to access the most advantageous products and rates, this could be in the form of a personal guarantee.
If you would like to discuss an informal option for your company we are experts in rescue and recovery and specialise in restructuring, why not have a complimentary meeting with one of our partners to discuss how we could potential help you to turn around your company. Call us on 020 8661 7878 or email insolvency@turpinba.co.uk