One of the biggest problems that consumers find they have to deal with is cash flow. It does not matter whether it is credit card debt or as in this case large renovation projects. If you do not have the cash to pay your bills eventually it will catch up with you and your going to need a loan.
This consumer buys homes that are in need of tender loving care, renovates them and sells them at a profit. Of course it takes time to complete the purchase, finalize the plans, finish the renovations and then make the sale. Only once the sale is completed is there cash to pay for materials, labor and taxes.
Managing your cash flow is extremely important, especially when there are delayed payments such as in this case. This consumer did not set aside any cash to account for the taxes that he owes on the profit he made in the past year. He wants to know what the best solution would be for him. He needs to be able to pay his $100,000 tax bill shortly.
It will be very difficult to find a lender to provide an unsecured loan. There simply is too much risk associated with this kind of loan. If the consumer has sufficient equity in the various properties he is working on, he might be able to obtain a loan secured against one of these properties. He will enjoy a better interest rate as well. There will be less risk for the lender since if he defaults on the loan, the home will be sold to recover the balance on the loan.
Depending on the actual timing of the due date for the taxes and the expected sale of his next development, there may perhaps be another alternative. He may want to enter into discussions with the government regarding a plan to pay his taxes over time. Of course there will be penalties and interest charges with this approach. However the government could end up being the lender for this $100,000 loan.
The accountant would along with the consumer need to put together a proposal to review with the government tax authorities. If they feel that this is a valid plan with a high chance of success, they might be willing to consider this approach as an option.
The bottom line for all consumers regardless of how much you owe is to manage your cash flow to avoid sudden payments that become due. Set aside funds to deal with the emergencies and in particular set aside funds to pay for future known invoices and tax debts.