Have you taken on one too many loans to keep your business running? If so, you may think you don’t have many options to get your debt under control.
You aren’t alone if you’re in this situation. 82% of small businesses fail because of cash flow problems.
Luckily, there are steps you can take to start getting your debt under control. This post will show you a few of those steps.
Keep reading to learn five things you can do to help you get control of your business debt.
1. Cut Your Costs
Before doing anything, lay out everything you’re paying for and figure out what you don’t need.
The chances are you have several small purchases adding up every month that are adding to your expenses.
You don’t need these.
Small purchases don’t seem like much, but over time, they can lead to a considerable monthly expense. Find other ways to get what you need.
2. Prioritize Your Debt
If you’ve taken a lot of debt, then you’ve probably got several accounts to get caught up with. You shouldn’t pay the bare minimum on each of them every month.
Take an inventory of your debt and figure out which accounts are charging you the most interest. These are the accounts that are going to cost you more money in the long run.
Try to make extra payments on these to pay down the balance ahead of time. Doing this will reduce the money you’re paying in the long run.
3. Negotiate Terms
Contrary to popular belief, you can negotiate your payment terms with your lenders.
After all, they want to get the money they lent you back.
If you are having problems making payments, talk with your lenders to see if you can negotiate better terms.
These changes can be anything from lower interest rates to lower monthly payments.
4. Debt Consolidation
Do you have a number that will pay off all your debt?
If so, think about consolidating all your accounts.
By taking a large loan, you can pay off all your current credit accounts. Debt consolidation allows you to move your debt to one loan.
This loan will often have a lower monthly payment and a better interest rate. It can make it easier to get your debt paid off.
5. File for Bankruptcy
Sometimes you get in more debt than you can handle. When this happens, your last resort will be bankruptcy.
It may seem like you will go out of business if you file for bankruptcy, but that doesn’t have to be a case. It can be a second chance.
But never take this action without exhausting all your other options. You will ruin your credit as a result.
Talk to bankruptcy attorneys to learn about your options.
You Can Handle Your Business Debt
Being in debt is never a good feeling, but don’t let that stop you from taking control of the situation. Use the tips above to get out of business debt so you can start moving your business forward.
If you are looking for more business finance tips that can help, head over to our article section. We have plenty of tips that will help you.