Student loan debts often represent a serious setback for young aspiring entrepreneurs. After all, starting a business while having debt you need to repay might not sound like the best possible idea.
It’s estimated that average student loan debt after graduation amounts to around $30,000. This often discourages graduates from even considering entrepreneurship, making banks cautious and hesitant to grant any loan on your name.
Although starting a business while repaying student loan debt is challenging, it isn’t impossible. Here are several solutions that can help you stay in control of your finances and build a successful, sustainable enterprise.
Table of Contents
Step 1: Handling your student loan debt
Superiorpapers financial advisor and writer James Moore highlight the importance of setting off the right way: Make sure to create a plan that will help you manage your existing debt first, as it’s crucial to keep your finances in check. The whole venture must be affordable for you, as ending up with more even more debt is the last thing you want.
Never miss making your regular loan debt payments. Failing to do so may negatively affect your credit score, making it difficult for you to obtain a new loan or another form of funding.
Modify your student loan debt repayment plan
Make a viable strategy that will help you set the foundation for your business’ future growth and sustainability. When it comes to debt repayment plans, there are several options to consider.
Inquire about extended repayment possibilities online, or plan a graduated repayment that will start off with lower amounts in the first few months, making them bigger as your venture progresses. Choosing a suitable form of student debt repayment can make it or break it for your start-up, so it’s vital that you approach this step giving it your undivided attention.
If none of these plans seems to offer the much-needed security you are looking for, you can also look into debt forgiveness options. These may relieve you of the entire student loan debt or at least a part of it, which can make a significant difference in your professional journey.
Step 2: Acquiring funding for your business venture
As you’ll have a lot of expenses in the initial phases of getting your start-up off the ground, your new business will surely not come for free. After you’ve planned the way you’ll be handling your existing debt, it’s time to start looking for funding.
There are several funding alternatives to choose from, including small business and start-up loans and donations from Angel Investors to exploring crowdfunding options, which are a popular choice of many new entrepreneurs these days. Each of these options can offer a way to start your business right, so make sure to carefully consider them all before making your final decision.
Your creative and original ideas, good credit score, and a thought-out business plan written in advance can make a significant difference when applying for any sort of funding. Make sure to get into this phase of building your business well prepared.
Step 3: Setting off and managing your business
Although it may seem like the “difficult part” is finished once you’ve managed your student loan debt and successfully acquired funding for your new start-up, your journey is far from over. Building a successful business venture takes time and patience, creating and nurturing professional connections, and staying up to date with competition and industry standards at all times.
To ensure your aspirations to become a productive entrepreneur become a reality, keep in mind the following advice that will help you stay on top of your game.
- Start slow, stay patient. Rome wasn’t built in a day, so don’t expect that a few right decisions will propel you into success instantly. Sustaining a profitable business depends on consistency, and the lack of patience and persistence can diminish your chances of making it all work.
- Reduce expenses whenever you can. To ensure the financial stability of your venture, stay humble and spend as little as you possibly can. Use your funds responsibly, distinguish the necessities from unnecessary expenses, and you will set a stable foundation for the development and prosperity of your business.
- Work hard and stay focused on your goal. You’ve come a long way since the time you needed to write your first academic essay. As an entrepreneur, you’re now facing a whole new set of challenges you need to tackle. Working hard and staying focused will help you make your dream a reality, so don’t get discouraged when you face your first obstacle.
Starting a business with a pressing student loan debt sure sounds like an intimidating assignment to set for yourself. Luckily, there are ways to make this venture a success, as long as you approach the process with caution, focus, and determination.
Research your competition, design your custom product or service, and follow the steps that lead you through managing your student debt, landing the funding you need, and getting your business off the ground. In time, with hard work and attentive care, you can successfully turn your small start-up into a profitable business.