LIMITED TIME ONLY: 3-5% for early payouts. Download app now for early access.

Rise Up From Debt: How to Save Your Small Business

April 6, 2022

It’s possible to grow your business while still managing your debt – find out how it’s done.

Small business image
When your business is in debt, it may feel overwhelming and impossible to dig your way out of it. Research shows that debt can result in depression and stress. Fortunately, with self-reflection, a game plan, and assistance, you can breathe again.

Assess Your Business Debts

Before you can work on debt solutions, you need to assess the problems. Take a look at your budget. Scour through at least a year’s worth of data to figure out your expenses. You need to know where your money goes before you can allocate funds smartly. Using a tool that features a loans API will help you by keeping track of your loan and liability information in one place. You’ll be better able to evaluate your options.

When you understand your business’s cash flow, you can log the money and see where you lose the most. If you have a company with seasonality, you may see a fluctuation throughout the year.

Create Realistic Solutions

Once you assess your debts and understand why you cannot crush your debts right away, it is time to think about realistic solutions to your problem. Start with budget creation. You can create a budget by estimating your business’s future finances. Look at the past and predict what your future should look like. Your budget should include your fixed costs, such as supplies, taxes, and debt repayment. In addition, determine your variable expenses. Such expenses may include your salary, equipment replacement, and marketing costs.

You can reduce some of your variable costs. When in debt, you cannot afford to spend money on things that may not have a guarantee of bettering your business. Try to reduce your expenses to pay off your debt and have money in case of emergencies.

Along with your budget, make sure you have a detailed business plan. Not only can you use a solid business plan to seek funding, but it can help you prepare for the future. When you create a business plan, you analyze the weaknesses in your business and develop solutions. In addition, you can better understand your strengths to recognize the potential you have in your market.

Ask for Help When You Need It

For financial help with your business, the government provides financing options. Public funds, loans, grants, tax credits, and financing programs can help you pull your company out of debt. When it comes to government grants, you may be dealing with multiple funding agencies. Before you apply for a grant, know what you want. There are grants specific to industries for you to assess. Look into both non-repayable and repayable grants.

When applying for grants, list the criteria for approval for different grants and draft your proposal. Your proposal should state your company’s objectives and outline your current budget and proposed future budget.

As you seek funding assistance, you can also hire a professional to help you manage your business debt. Having a program to track your expenses can be a good place to start, but you may also want the help of a financial manager or accountant. A financial manager can assess your financial situation and help you develop realistic options to pay off your debts or point out which grants to look into for your company.

It is possible to build your business and pay off your debt. It starts with discovering your problems, creating solutions, and learning to ask for help if you need it.

This article details how you can save your small business from debt.

Cherie Mclaughlin has been creating and growing couch-based businesses since her couch was in a dorm room. Through both success and failure, she knows that all it takes to be successful is a willingness to go into it with the understanding that it’s a learn as you go process, and the boldness to step out of your comfort zone and give it a shot.