A sole trader is supposed to be legally responsible for each and every aspect of his business and he is also personally liable, as far as, his business finances are concerned. Sole proprietors or traders have the right to keep the profits to themselves. Similarly, it is their duty to repay all the business-related debts themselves. For managing debt, the option of debt consolidation loan for sole traders is always there.
Responsibilities of Being Sole Trader
A sole trader is definitely self-employed but that does not really imply that he is the only worker involved in the business. A sole trader actually refers to a legal business structure rather than just the number of workers or employees. In financially troubled times, what options are open to sole traders to deal with their debts as they do not enjoy any sort of legal protections that are there for a limited company?
The directors of the so-called limited companies are actually protected legally from the business debts. Whereas, the sole trading company’s business debts are to be paid off by the sole trader. As according to law, there is absolutely no difference between a personal debt of the sole trader and the business debts of the sole trader. As such, all liabilities of his business are regarded as personally his.
If you are a sole trader and struggling to pay off your business debts then it is mandatory to browse through debt consolidation reviews online to learn more and take effective steps. In this context, you must understand that the options available are actually the same as the ones available to a person with personal debt issues and you would be entitled to the same sort of protection from the creditors.
Debt Consolidation Implications for Sole Traders
Debt consolidation is an effective method that is utilized by several sole traders for consolidating their business debts all into one single lower and affordable payment, thus, making your monthly repayments or outgoings far more manageable.
Benefits of Debt Consolidation for Sole Traders
- All current or existing loans and credit card repayments are effectively converted into a single monthly payment which is usually, far easier to manage. Moreover, you could easily keep monitoring the financial scene.
- Interest rates are generally lower. As such repayments are more affordable.
- Less harassment and stress in handling multiple creditors and collection calls.
- Eventually, you could save some money and on a particular date, your loan would be fully paid off provided you are regular with your monthly payments.
- Your credit rating could be boosted as there are fewer chances of you defaulting.
Drawbacks of Debt Consolidation for Sole Traders
- Debt consolidation does not mean you have become debt-free. You have simply shifted your debt to another more favorable payment plan.
- Ask for a fixed rate, as far as, the interest rate is concerned, for your debt consolidation loan otherwise, the payments would keep changing. Be careful about the interest rates.
- You may have to pay some fees for obtaining the debt consolidation loan.
Debt consolidation could be providing best solutions to all your financial problems relating to your trading company. You may consider reducing business payment commitments, and even boosting cash flow with the help of an effective debt consolidation loan. Seek professional debt consolidation advice for restoring your company to a certainly dominating position.