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Debt End

Money-management tips to help you stay out of the poorhouse

This story appears in the July 2000 issue of Business Start-Ups magazine.

Overwhelmed by maxed-out credit cards? Installment payments? Personal and business loans? And all this on top of day-to-day business and living expenses? Many start-ups are. Sure, you can juggle and struggle for a short time, but interest-only payments on some debts and minimum payments on others may set you up for disaster. An economic downturn, loss of a major client or any setback can impact your credit rating, prompt lawsuits or force bankruptcy. To avoid disaster tomorrow, take action today with these tips:

Stop borrowing. You can't borrow your way out of debt. Instead, look into a bank loan or a line of credit guaranteed by the SBA. Lines of credit, available through banks at about prime plus two, are ideal for getting through a cash crunch. If you need equipment or supplies only temporarily, ask suppliers for credit. They often allow a 30 to 60 day extension on payments. Interest, when asked for, is usually reasonable.

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