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I recently started working for a small law firm.  The partners are asking me to help them consolidate their high-interest credit card debt.  They don't have any significant assets, other than some law books and some computers/servers, and the partners don't have the best credit.  They say they have tried getting a loan from traditional banks, but have been denied.

The credit card debt is currently around $28K on two cards.  One account has most of the debt interest free until July, when the interest on both accounts will be at 28% and 29%.  They are paying about $900/month, which will result in the payoff taking 4 years 7 months, with a total cost of around $21K in interest alone.  My goal is to consolidate the debt with an interest rate of 10% or lower.  Any suggestions on how I could do this?  I would appreciate some general guidance, as I have never dealt with business finances before.  Thanks.

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Sell some litigation and pay it off?

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It is difficult to get a business loan without significant assets or a track record of good cashflow/profit etc.

Perhaps the partners could make a personal loan the partnership and get paid back over time as business picks up. Are there outstanding payments from clients? Do they anticipate business to pick up?

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snnistle said:   I recently started working for a small law firm.  The partners are asking me to help them consolidate their high-interest credit card debt.  They don't have any significant assets, other than some law books and some computers/servers, and the partners don't have the best credit.  They say they have tried getting a loan from traditional banks, but have been denied.

The credit card debt is currently around $28K on two cards.  One account has most of the debt interest free until July, when the interest on both accounts will be at 28% and 29%.  They are paying about $900/month, which will result in the payoff taking 4 years 7 months, with a total cost of around $21K in interest alone.  My goal is to consolidate the debt with an interest rate of 10% or lower.  Any suggestions on how I could do this?  I would appreciate some general guidance, as I have never dealt with business finances before.  Thanks.
 

  

Did they try business or personal loans?

What do you mean the partners don't have the best credit?  Poor credit scores personally?

 

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They need to start working more and paying themselves less.

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Mickie3 said:   
snnistle said:   I recently started working for a small law firm.  The partners are asking me to help them consolidate their high-interest credit card debt.  They don't have any significant assets, other than some law books and some computers/servers, and the partners don't have the best credit.  They say they have tried getting a loan from traditional banks, but have been denied.

The credit card debt is currently around $28K on two cards.  One account has most of the debt interest free until July, when the interest on both accounts will be at 28% and 29%.  They are paying about $900/month, which will result in the payoff taking 4 years 7 months, with a total cost of around $21K in interest alone.  My goal is to consolidate the debt with an interest rate of 10% or lower.  Any suggestions on how I could do this?  I would appreciate some general guidance, as I have never dealt with business finances before.  Thanks.

  

Did they try business or personal loans?

What do you mean the partners don't have the best credit?  Poor credit scores personally?

 

  From what I can tell, they tried business loans, but since there are not any assets with the business, I think their personal poor credit affected their ability to secure a loan.  

They are hard working lawyers, but of their own admission, they are not the best in business.  They have made some poor business decisions, and are hoping I can help them straighten the ship over the next couple of years.  I am looking for ideas that are out of the box.  I'm tempted to look at Lending Club, and I've even been tempted to give them a personal loan, but I'm not comfortable with that.  Any other ideas?

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snnistle said:   
Mickie3 said:   
snnistle said:   I recently started working for a small law firm.  The partners are asking me to help them consolidate their high-interest credit card debt.  They don't have any significant assets, other than some law books and some computers/servers, and the partners don't have the best credit.  They say they have tried getting a loan from traditional banks, but have been denied.

The credit card debt is currently around $28K on two cards.  One account has most of the debt interest free until July, when the interest on both accounts will be at 28% and 29%.  They are paying about $900/month, which will result in the payoff taking 4 years 7 months, with a total cost of around $21K in interest alone.  My goal is to consolidate the debt with an interest rate of 10% or lower.  Any suggestions on how I could do this?  I would appreciate some general guidance, as I have never dealt with business finances before.  Thanks.

  

Did they try business or personal loans?

What do you mean the partners don't have the best credit?  Poor credit scores personally?

 

  From what I can tell, they tried business loans, but since there are not any assets with the business, I think their personal poor credit affected their ability to secure a loan.  

They are hard working lawyers, but of their own admission, they are not the best in business.  They have made some poor business decisions, and are hoping I can help them straighten the ship over the next couple of years.  I am looking for ideas that are out of the box.  I'm tempted to look at Lending Club, and I've even been tempted to give them a personal loan, but I'm not comfortable with that.  Any other ideas?

  Put up some accidente billboards and get busy harassing insurance companies into cutting settlements?

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snnistle said:   They are hard working lawyers, but of their own admission, they are not the best in business.  They have made some poor business decisions, and are hoping I can help them straighten the ship over the next couple of years.  I am looking for ideas that are out of the box.  I'm tempted to look at Lending Club, and I've even been tempted to give them a personal loan, but I'm not comfortable with that.  Any other ideas?
  Lending Club might be a good idea.  Giving them a personal loan is NOT a good idea.  If a bank, with a highly diversified loan portfolio, won't loan them money, there's no way you should...

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There is something fundamentally wrong here if two or more partners working full-time can't earn their way out of a 28k debt. That's like a fleabag practice from a John Grisham novel.

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don't know what "not the best credit" means. more like 640 or 540? if it's the former, contact several credit unions. probably won't get 10%. but might get something in a 12-18% range.

if it's more like 540, tell them to slash expenses (or take on a roommate) until FICO improves to 620+.

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snnistle said:   I recently started working for a small law firm.  The partners are asking me to help them consolidate their high-interest credit card debt.  They don't have any significant assets, other than some law books and some computers/servers, and the partners don't have the best credit.  They say they have tried getting a loan from traditional banks, but have been denied.

The credit card debt is currently around $28K on two cards.  One account has most of the debt interest free until July, when the interest on both accounts will be at 28% and 29%.  They are paying about $900/month, which will result in the payoff taking 4 years 7 months, with a total cost of around $21K in interest alone.  My goal is to consolidate the debt with an interest rate of 10% or lower.  Any suggestions on how I could do this?  I would appreciate some general guidance, as I have never dealt with business finances before.  Thanks.

  OP, get out of there and get out of there NOW.

That really sounds like a business that uses the credit of the employees to get loans, pass on debt, and basically out to ruin your credit.
Sorry but it also sounds like they have issues with payroll.  

Find a better job, now!

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cestmoi123 said:    Giving them a personal loan is NOT a good idea.
 

  Indeed it is a very bad idea. Worth repeating so that the important message is not lost in the midst.

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