If you are a giant industry, serving a long clientèle, you might have several secured sources of financing your business. But if you are a small business with a few number of employees, it would be difficult for you to manage, if the cash flow suddenly declines. Lack of revenue will result into delay in payments to your employees, paying off the bills, lack of maintenance of the infrastructure etc. which will lead to gradual loss of profit in the long run. In a situation like this debt consolidation firms and credit counsellings agencies might prove to be of much help.
Individuals who face problems in making the daily ends meet or paying off the debts within the scheduled time, credit counseling agencies help them out thoroughly. These agencies are home to group of efficient professionals who have years of experience of dealing with loans and debt and they offer consumer credit counseling services, to all their customers. These agencies offer many individuals sufficient help to survive through difficult financial situations. These agencies usually contact the companies with which you have the debts and try to form some repayment plans which is favorable for both the sides. There are a number of service providers who work as nonprofit agencies and have exemplary reputations with the creditors and banks they work with. Again, there are some credit counseling services, that are for-profit organizations, but they too, have quite fair reputation and provide top-notch services to all their cash-strapped customers.
Like these consumers, small businesses, too, face same financial crunch due to absurd expenses for maintenance, an unpaid invoice or late payments, or certain other circumstances that will change the financial situation of your company. Usually most businesses have several plans following which they can endure the negative cash flow for several months, which is a rare occasion, but there are situations when small businesses might face some severe problems. Most usually, credit counsellings agencies have pre-scheduled agreements ready at hand with the credit card companies and other creditors who can offer a lower interest rate on all your debts. This is always helpful as this will allow you pay off your debts faster.
The usual services of credit counseling agencies include -
- Budget counsellings
- Money management education
- Debt counsellings
- Housing Counsellings
One of the major services that these agencies offer is the debt management plan or (DMP). According to this plan, the agency makes attempt to reduce the monthly payments and interest rates not only with the creditors, but also with the credit card companies. If requested by the customer, the monthly payments are consolidated into a single payment and are paid by the DMP participants to the credit counseling services. And after this the funds are disbursed to the creditors, according to the previous planning. The cost of services that are charged for these services, vary from agency to agency, according to the state law. But there are a number of agencies who provide counseling services at free of cost or at nominal cost.