You’ve got a great business idea. You’ve also got a lot of student loans. Does the latter mean pursuing the former is always impossible, or is there a way to put your ambition to work in starting your own company even when you’re in debt for your education? If you’re like the average college graduate, your repayments may be around $300 to $400 monthly or even more, and along with your other expenses, it can feel like you just can’t scrape up the capital or take the risk of becoming a business owner. The good news is that while student loans represent an obstacle to starting your own business, they are by no means an insurmountable one.
Lower Your Payments
Depending on your credit rating and the type of loan you have among other factors, it might be possible to get that repayment amount down much lower. If you have federal student loans, you might qualify for an income driven repayment plan or federal loan consolidation. However, if you don’t qualify for either of those or your loans are private, another possibility is refinancing them. To get an idea of how much you can save through refinancing, you can use a student loan calculator that determines what your savings may be.
Protect Your Credit Rating
Some lenders and investors may look at your personal credit before deciding to give you a business loan or investing in your company. Therefore, whether or not you are able to lower your student loan payments, you should make an effort to keep up your payments as well as protecting your credit score in other ways. Try to avoid taking on any additional debt at this time, and don’t fall behind on any other payments either.
Make a Plan
There’s a lot more to running a business than a good idea. If you’re waiting until you are on firmer financial footing to launch, there is a lot of legwork you need to be doing in the meantime anyway. For example, it’s critical that you do some market research and consider whether there is a need for your product or service as well as how to market it. Keep in mind that you need to go beyond surveying your family and friends. Focus groups and surveys of potential customers as well as industry research can all help you gather the information you need. You should also start writing a business plan and considering what kind of business entity you want to form as well as whether you will need any licenses, permits or insurance. It might be a good time to pay an attorney for a one-time consultation.
Stay Focused
If you have to put your plans on hold for a little while, it can be easy to get discouraged, but success in business is all about pushing through fallow times and challenges. Remember that you don’t have to be debt-free in order to start your business. You just need to have a realistic financial plan and a cushion. You can also start working on your business on the side while keeping your day job to ensure that you have some income flowing for a while.
