How to manage Business Debts

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The first five years are some of the most difficult for businesses. The scramble to repay loans, increase market visibility and ensure a rise in positive cash flow could become overwhelming for a business trying to make headway in a competitive market.


Small businesses could be caught in this web, and begin to run into debt that would eventually sink the business.

Below are useful tips on how to manage business debts, while staying afloat:

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1. Develop a comprehensive business plan: A comprehensive business plan would include a lot of things. There would be a plan on how to utilize loans collected in order to grow the business. There would also be plans on how to increase revenue and how to effectively repay each loan without hurting the business finances.

A good plan would act as a guide and help steer the business in the right direction. It also allows you to focus on what is important at the moment. For example, repaying loans with high interest rates would be a priority than purchasing expensive office equipment.

2. Reduce operation cost: It would seem a beautiful idea to throw in cash to boost sales and increase the revenue of the business, but in some cases, it could be counterproductive.

Some situations might need you to do the opposite, cut costs. A reduction in the cost of operating would generate an increased cash inflow if managed appropriately.

This could be done in a number of ways, which might include renting a cheaper and smaller office space, purchasing cheaper options with similar results to expensive ones, and reducing staff members.

3. Increase revenue: The logic behind this is simple enough. More money equals more freedom to implement things to your business, and faster loan repayments.

Countless ways exist to improve your business revenue. You could opt to increase your social media presence, or engage in community activities to grow your visibility.

Discount sales, or increased price with a reduction of price in bulk sales would also help to increase revenue, because of increased client purchase. Also, loyalty bonuses might encourage customers to return to your business for services.

4. Consolidate or refinance loans: You can take out a loan to clear your outstanding debts. This is called loan consolidation or loan refinancing. This is helpful to businesses that have little time to pay off debt and can’t raise enough funds. It also affords enough time to raise funds and pay off the consolidated loan.

5. Renegotiate terms: You can renegotiate loan terms if they are proving too difficult to pay. Banks and lenders would rather you pay a substantial part of the money than paying nothing at all.


Loans might seem difficult to pay at times, but they are various ways around it. They could be quicksand that pulls businesses under, but some methods help pull businesses out of such situations if applied correctly, the methods stated in this article would go a long way in doing just that.

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