5 Ways To Manage and Pay Off Your Business Debt

Debt is sometimes essential to get or keep a small business up and running. However, it can cause undue stress and headaches. It can become an unsustainable expense and hinder your business objectives over time. Here are five tips to help you manage your business debt to help you get it under control.

  • Take Inventory of Your Debt

 

Sort your debts according to interest rate and monthly payment. This includes payments on business loans, and business credit cards, as well as supplier invoices.

 

This process can help determine which debts to tackle first. Experts advise beginning with the highest interest rate debt first then moving on to the lower ones.

  • Boost Sales

 

Once you’ve established a debt management strategy, you can consider ways to increase your sales. Here are a few suggestions:

 

  • Reward devoted customers. A loyalty program can boost customer satisfaction and retention.
  • Get active on social media. Interact with customers on social media. Respond quickly to comments, ask for feedback, and keep an eye on your company’s online reviews. 
  • Consider increasing your prices. You can do this without losing customers if you use the right strategy, such as offering a large discount on big orders.

  • Talk To Your Creditors

 

Reach out to your creditors if you see that you are about to fall behind on your debt obligations, or if you are already behind. Proactive communication can help you keep your situation under control. Creditors are frequently willing to work with borrowers who are in a bind, particularly if those borrowers communicate early.

 

Creditors may be willing to lower your interest rates, make temporary changes to your repayment obligations, or even assist you in consolidating your debts into new debt with better terms. Simply ensure that you understand how consolidation works.

  • Cut Costs

Ideally, increasing sales generate enough revenue to pay off your debt. However, if your expenses are out of control, here are three ways to reduce them:

 

  • Sell any equipment, office supplies, or other items that you don’t use regularly. If necessary, purchase used equipment or lease it.
  • Consider downsizing to a smaller office with lower rent and utility costs, joining a co-working space that does not require a long-term lease, or relocating to a home office.
  • Costs can be shared with other businesses. Look for other people who run similar businesses and think about sharing resources. 

 

If you’ve already tried the above strategies and you seem to be stuck in the same place, perhaps you can consider consulting professional services. That is where Jeremy Mkay Associates comes in. We provide audit & assurance, tax and specialist advisory services to privately held businesses and non-governmental organizations. Get in touch with us here and we’ll save your business from drowning in debt.



Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Email
Phone
WhatsApp
WhatsApp
Phone
Email
This website uses cookies and asks your personal data to enhance your browsing experience.