Student debts hinder start-up businesses in North and South Carolina

The entrepreneurial spirit is alive and well across the United States but many young adults looking to start new businesses find themselves in difficult situation. Most college and post-secondary graduates are burdened with tens of thousands of dollars of student debt. Collectively, there is $1 trillion in education loans outstanding among former U.S. students, many of whom have plans to open their own businesses.

Student debts hold back many current or potential business owners because the financial burden of the monthly payments hinder their abilities to expand or form much-needed companies. A survey by Young Invincibles - a nonprofit youth advocacy organization - revealed that nearly a quarter of respondents were unable to start new businesses solely due to student debt loads.

The Small Business Administration reports that, over a five-year period, self-employment rates for those age 25 and under fell nearly 20 percent while rising nearly 25 percent for those age 65 and over. Student debts greatly reduce business owners' abilities to obtain business loans or obtain commercial leases for prime properties. For many, it may take decades to pay off all of their loans, keeping them from providing not only employment for themselves but others as well.

Small businesses in the Carolinas

According to the North Carolina Department of Commerce, there are over 800,000 small businesses in the state and nearly 60 percent of those businesses employ less than five employees. Both North and South Carolina actively seek to attract new businesses to their states through a variety of business grants and development tools in an effort to boost their employment rates and ensure economic growth.

The amount of debt one owes may have a big impact on his or her ability to delve into a new business venture or expand an existing business. However, with strategic business planning, it may be a surmountable issue. It is important for all people looking to start up new businesses to consider carefully how their business goals may be accomplished. Common considerations include:

  • Choosing the best corporate or business form.
  • Planning and setting up the business correctly from the start.
  • Protecting the business and the owners from liability.
  • Creating the proper documentation for business formation and continued operation.
  • Retaining necessary professional help.

Seek legal counsel

If you own a business or are looking to open a new business in South or North Carolina, seek the advice of an experienced business lawyer. An attorney knowledgeable about business and corporate law can help you establish a business plan and guide you through the process of set-up and implementation of your plan. A lawyer may also advise you about continuing business matters such as contract disputes, employment law issues and business dissolutions.