Business Credit Card Debt Consolidation:
Pitfalls and Help Lines

Business credit card debt consolidation isn't for the feint of heart.  It takes guts and perseverance to effect a real change, one that will impact your bottom line.  AND it takes a very strong business plan to pull it off.

"Business" Credit Card vs "Personal" Credit Card

You know all those great reforms, the ones holding credit card companies accountable for acting fairly?  Guess what.  They don't apply to business credit cards.  Nope.  Only personal credit cards.  I guess the wise guys thought that businesses are savvy enough to fend for themselves.

So an awful lot of businesses have found themselves in a predicament.  They have used credit card financing to get their business up and running, or to get through a tight spot, and now they are stuck paying very high rates, and are unable to get any further financing anywhere.

Consolidating Business Credit Cards -- The Logical Steps

Logically, a business person should be able to go into a local bank, set the bills on the table and ask for a consolidation loan, one with lower interest.  After all, the logic is there.  Lower rates with one payment a month, and a real possibility of paying off that debt and freeing up extra cash in the interim.  Any banker should love it.

But logic doesn't always work in business finance.  In reality, as soon as you step into the bank and put those bills on the table, you have labeled yourself as a poor businessperson.  That doesn't mean you ARE a poor businessperson.  It just means that the bank sees anyone who uses credit cards like you have to be a financial risk.

So you can pretty much forget logical steps.  Bypass the banker and look elsewhere.

Business Credit Card Debt Consolidation -- the Illogical Approach

Here is where your creative ability comes in.  Look at other sources of funds, especially those who have something to benefit from your remaining in business.

First, create a business plan just for this circumstance.  Set out how the company is being reorganized and re-energized.  Truthfully demonstrate how it will prosper.  There is no sense in puffing smoke ... anyone half smart will see through it.  Include in that "reorganization", the payoff of the credit card debt.  Call it "existing debt", not credit card debt.  And show how the freed up funds will be used to stabilize and grow your business.

There are several places you can present a business plan like that, such as:

Your Bank.  Here you are not asking for a business credit card debt consolidation loan.  You are looking for a business reorganization and expansion loan.  That is a whole different outlook.  Banks actually look at these, especially if you have a history with that bank.

Your Major Supplier.  If anyone is to benefit from your success, it is a major supplier.  If that supplier is financially strong, see what you can do.  You've got a double edged sword here: If you get the funding, the supplier gets more business.  If you don't get the funding, the supplier loses a very good customer and lots of sales.

Local Community Organizations.  A lot of government assistance is funneled through community business organizations.  Check with the local SBA and find out which organization in your area benefit from those funds.  They often have money to lend when no one else does. 

Business credit card debt consolidation loans are not easy.  If your credit cards are in your personal name, there may be an organization that can help you consolidate and stretch out payments.  But if the cards are in the business name, look to the options above.

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