Tuesday 9th of February 2010
If you run your own business you may have tried to apply for a personal loan in order to help keep your venture afloat, but found lenders have slammed their doors in your face.
The Financial Times reports that businesses are finding it hard to get hold of cash required. But should a personal loan be seen as one way to dig your firm out of debt then getting some questions on individual voluntary arrangements (IVAs) answered could be a better option.
You may be falling deep into the red but worried whether or not you can apply for an IVA if you are self-employed.
If you can prove that profit from your business covers the cost of IVA repayments and you meet other conditions then an IVA could be ideal. You can also stay in a directorship position under an IVA, unlike bankruptcy.
"Credit cards are widely used by small entrepreneurs to finance their businesses. This is expensive and creates high risks of building up unmanageable debts if trading disappoints," warns the newspaper.
Rather than propping up your business with credit cards, undertaking an IVA could help you clear your unsecured debts whilst continuing to operate your company.
By Chris King
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs could reduce the climbing rate of unsecured debt
