In business, as in life, we've all experienced good times and bad. You will know this to be especially true if you are self employed. If you're in a business that is cyclical, how do you manage your financial obligations during slower times?
Answer: Get a Line of Credit
The best time to arrange a line of credit is when times are good, but if don't have that prearranged, I would strongly encourage you to do it before you start missing any debt payments!
Sadly, I've met a number of people over the years who don't get that concept. Instead, they come to me when their credit is already damaged, and instead of borrowing money at Prime (Prime is 3% at the time of this writing), or in some cases below Prime, they end of paying exhorbitant rates and fees to borrow money.
I recently arranged a mortgage for a self employed couple who were in a cyclical business. Over a period of several years, each time their business went through a down cycle, they did the worst thing they could possibly do; they stopped paying their credit cards! Over a period of time, the couple refinanced their home several times. The problem was that their credit was always bad because they were always looking to borrow money after they started missing payments. As a result, they always ended up paying much higher rates and fees to borrow money than they would have otherwise had to.
Since banks can be very sticky about loaning money to self-employed borrowers, it's important to have a hard working mortgage broker you can trust to help you find the best mortgage. The good news is that there are lenders out there who are happy to loan money to self employed applicants at very good rates. This is especially true if you take steps to access the money you need before you start missing any of your debt payments.
For help with your next mortgage, call me, David Grossman at 416 876 2031. I look forward to hearing from you!
VIDEO: HOW TO PAY OFF YOUR CREDIT CARDS
Thanks for watching. I look forward to hearing from you!
David Grossman MBA
Tel: 416 876 2031