You need cash to grow your business, but too much debt can put your company at risk.
The simple solution is to adopt measures that can help you manage your debt efficiently. And to help you with that, Canada-based cash advance lender Eazy Cash has compiled a neat list of things to do.
Top Tips for Managing Small Business Debt
Here are some simple tips to manage your business debt, fro alternative lender Eazycash.ca.
Review Interest Rates
Is the interest on your business loan substantially higher than current rates? Do you have a strong credit history? Either way, you should consider refinancing to obtain a loan with lower payments.
Before approaching a lender, make sure you have reviewed your credit report to understand where you stand.
Negotiate with Creditors
If you have long-term business relationships with suppliers, or if you engage the same suppliers for bulk orders, you can try negotiating a discount.
To get a good deal, emphasize your good payment history. You may also team up with other small businesses to submit larger orders at lower prices.
Optimize Space on Your Premises
Do you have portions of your premises that you’re not utilizing today? You may want to consider subletting the space to others to reduce your rental costs.
Consolidate Multiple Loans
You may have taken several loans for different purposes resulting in higher monthly payments. A simple solution is to consolidate multiple business loans into a single payment. This will reduce your monthly costs without impacting your credit score.
Consider Redundancies
For a small organization, laying off employees is a difficult decision. It affects your company’s productivity and creates an awkward workplace situation. But in some cases, it can help you stay afloat. Consider it only if you have run out of all other options.
For more practical tips on how to manage your business debt, check out the infographic below:
Calculating Finances Photo via Shutterstock
Sometimes refinancing all your debt into a long-term loan may make the most sense to create significant cash-flow. It might not seem ideal to take a credit card debt, a short-term equipment loan or even a personal you took from a family and roll all into one loan long-term loan. It is easier to manage, in many cases your credit profile will improve significantly within a 60 day period because you are creating more utilization.
Rolling credit card debt onto a simple fixed interest rate term loan also help significantly when applying for future business or personal loans as banks, credit unions, and the new fintech space consider you as less risk because the terms loan carries a fixed term when the loan will be paid and the rate will never adjust upward as oppose to a credit card or a line of credit.