Nearly all businesses take on debt from time to time; after all, financing is useful for everything from equipment purchases to real estate acquisitions. But if your company has business debt that has worn out its welcome, the following tips can help you vaporize it.
Make and Stick to a Budget
Many companies find themselves dealing with excess business debt because of shaky or nonexistent budgeting. Whether or not budgeting errors are the direct cause of your company’s debt load, creating and sticking to a strict budget is a good step toward reducing debt. If nothing else, it can help you avoid the temptation of taking on more debt, since that ostensibly won’t be in your new budget.
Cost-cutting is another great tool for lowering business debt. Whether it’s a subscription service none of your employees use or an excessive perk like fancy lunches, unnecessary expenditures quickly add up. The more of them you eliminate, the more cash you’ll have to put toward paying off your business debt.
If your business debt is making it difficult to meet your business’s financial obligations, consider reaching out to your lender(s). Generally, lenders don’t want to have their borrowers fall behind on payments, and they may be amenable to options like extending your loan’s overall length, in turn reducing monthly payments. Other changes like interest-rate tweaks or even balance reduction may also be on the table. In any case, you stand to lose nothing by asking.
Consolidation is one more technique companies can use to make the debt more manageable. For instance, using a lower-interest loan to pay off several higher-interest business credit cards may both reduce your overall monthly payment burden and make it easier to stay on top of bills. Just be sure you’re working with a reputable debt consolidation company.
Interested in financing solutions tailored to your company’s needs? Get in touch with Array Financial today.