For the aspiring young entrepreneur, there is no greater bane to his or her personal dreams and aspirations than student debt.
Already, there are clear signs that student debt have significant impacts on personal spending habits. The Federal Reserve Bank of New York’s Research and Statistics Group reports for example, that “homeownership rates between 2003 and 2009 were significantly higher for thirty-year-olds with a history of student debt than for those without.” The same report cited a decrease in automobile purchases for those burdened with student debt. Forbes links the lack of consumer spending with a depressed economy, noting that “What this means is that we are spawning a generation whose debt loads are already so high that they will be forced to forego the consumption necessary to create demand and employment for the rest of us–and consumers are the true job creators.”
How dangerous are student loans for the economy? The total student debt is estimated to be around $1 trillion, while the average student is estimated to be around $24,000 in debt. Forbes points to several factors that are dangerous for the economy: “First, there is broad agreement that the delinquency rate mentioned above is understated because of the means by which repayment can be deferred. To make matters worse, the most recent graduates will have faced the highest costs and will be emerging into what continues to be a very poor job market.”
On a personal level, the young entrepreneur has to worry about repaying personal loans before ensuring that they can properly fund their business. It’s clear that rather than going through the potential risks related to funding or having a business venture fail, most college graduates with student debt would rather rely on established firms and well-funded jobs as opposed to starting their businesses. Moreover, for the student who has been delinquent on their student loans, a damaged credit score may destroy their chances of ever receiving loans necessary to begin a business.
Unlike traditional bank lines of credit, that focus on a credit score, factoring focuses on receivables from customers and their ability to pay. Where lines of credit may be denied to companies with high growth curves, factoring is a great option, based on a company’s customer base.
Overnite Capital focuses on helping young entrepreneurs in a manner where the credit score is not the sole indicator of a businesses’ worthiness for funding. Take the steps to secure an immediate cash flow by contacting Overnite Capital today.