Stacking is taking out multiple loans or advances at the same time with multiple payments. Although it may appear harmless, stacking can have severe consequences for small businesses. By accumulating debt through multiple loans or lines of credit from different lenders, businesses may find themselves in a precarious financial situation. This makes it more likely that they will default on their loans and experience financial distress, ultimately leading to decreased profitability, reduced access to future funding, and even bankruptcy.
To avoid these negative consequences, small businesses must carefully consider their funding options and only take on the amount of debt they can realistically manage. Being proactive and strategic in their financial decisions can set businesses up for long-term success.
Consolidations allow businesses to combine multiple cash advances into one manageable payment. This not only simplifies the payment process but also helps to lower payments and improve cash flow. By consolidating loans, businesses can alleviate financial stress and focus on what really matters - growing their business.
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