Carrying student loan debt and want to start your own business? Keep reading.
Chances are if you clicked on this blog post you’re considering just that and weighing your options, or you’ve already crossed that threshold and need a little help. According to the Federal Reserve Bank of New York, Americans have $1.36 trillion in student loan debt as of September 30, 2017. The majority of that is carried by adults under the age of 30 - so you’re definitely not alone. Hefty student loans can make starting a business extremely challenging. Here’s 4 ways to consider tapping into your entrepreneurial spirit when you have student loan debt.
- Consolidate student loans. You can consolidate federal loans if you have loans with different service providers. The U.S. Department of Education can give you up to 30 years to repay your loans when you consolidate, so your monthly payment will also be lower. Another plus of consolidating is moving from variable-rate loans to a fixed interest rate. It’s not without caveats, though. You might be trading certain loan-cancellation benefits, principal rebates, even interest rate discounts if you consolidate. You could also pay more over the cost of the loan since you’ll be paying for a longer period of time.
- Alternative funding. Most people don’t have the funds to start a new business, especially those with student loan debt. Asking family and friends is probably the oldest trick in the book, and thousands of small business have launched with family help. Be sure to lay out the terms, and treat the transaction like you would a business deal. There’s also peer-to-peer lending, which matches companies or individuals with lenders willing to give money – avoiding traditional bank loans entirely. Companies such as Peerform offer loan alternatives depending on your goals in minutes after you submit a few forms.
- Business loans. The U.S. Small Business Administration has lending partners who work with small business owners, offering lower down payments, competitive terms, and even counseling to help with your small business.
- Live like a college student. Easy on the avocado toast, just kidding! Get a roommate, cook meals at home, take public transportation, brew your coffee before you leave each morning. Even picking up a part-time job is a great way to pay down your student loans quicker.
Having student loans doesn’t always mean your start-up is a no-go. There’s plenty of potential opportunities available for budding entrepreneurs who are ready to take a chance – with lots of hard work and sacrifice, you may be able to make your dream a reality.
This material is for informational purposes only and is not legal or business advice. Neither AmVenture Insurance Agency, Inc., nor any of its subsidiaries or affiliates, represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Individual coverage may vary and may not be available in all states. Claim examples are general, may or may not be based on actual claims, and are for illustrative purposes only. Any available coverage for a claim will be determined based on the facts and circumstances of the claim as well as the terms and conditions of the policy, including any applicable exclusions or deductibles. In the event of a conflict with the material herein, the terms and conditions of any issued policy will control.
Peerform is not affiliated with AmVenture Insurance Company, Inc. and has not endorsed AmVenture products or services.