Are you tearing your hair out because your business is in the red? Calm down and take deep breaths. It might seem impossible right now, but you have options.
You might have to do something desperate like ask family and friends for help, get a second job, or hire your spouse but you won’t lose your company if you play your cards right. Are you too stressed out to think right now? Don’t worry we can do the thinking for you.
Here are ten business debt relief tips that can get your company back on its feet and keep your doors open.
Business Debt Relief: 10 Options to Consider When You’re Deep in Debt:
1. Increase Your Revenue:
There are a few ways that you can increase your revenue. You can do a few promotions and hand out coupons to get a little interest from loyal and potential customers. Don’t go too extreme with the discounts though, that will have a counter effect.
If your margins are fairly low you might have the ability to increase prices. It could turn potential customers off but you’ll keep loyal customers who know your product is well worth it.
If you have a lot of stock just sitting in the back you might be able to sell it off for more cash. This might leave you a little less to sell customers but it’s a fast way to make money. It’s not worth much if it’s just gathering dust after all.
2. Have Customers Pay Sooner:
When customers are billed an invoice it might be sometime before it actually gets to you. For example, if you give customers 90 days to pay you, they are typically going to take the entire 90 days. Considering decreasing this time frame to get paid faster.
You might be able to pull a little extra income if you chase down customers with a past due account. Check your records and give all of these customers a phone call to remind them that they owe you money.
If they don’t want to pay you, hire a collection agency. You’ll have to pay for them but it’s better than never getting any of the money back.
3. Look to Cut Your Costs:
When your business is in the red, it’s time to revisit your budget and cut costs away from things that are nice to have but not necessary. There are a few ways that you can do this.
You can make a bunch of small cuts from things that don’t really matter much, like the potted plants in the office. You can also cut back on one very large thing like a delivery truck or an item that’s not selling well anyway.
4. Prioritize Debt:
There a million ways for you to prioritize debt and it’s different for everyone. You first need to look at the debt that is a big deal and has the potential to cripple your company exponentially.
You want to look at the debt that may hurt your relationships with partner companies or vendors. Also look at interest rates so you can pay off the debt with the largest one first.
5. Negotiate Terms:
You won’t know if you can get a better deal from your creditors unless you ask them. Keep in mind that they don’t want your company to fall under and close. If it fails they don’t get paid.
They might allow you to make smaller payments or give you a little more time to pay your debt. It’s worth the phone call.
6. Ask Family and Friends to Help Out:
You might feel a little ashamed by this, but there is nothing wrong with asking your family and friends to help you out in a trying time. Someone that knows you may be willing to pay off your loans if you promise to pay them back.
A family member or a friend will be more willing to work with you than your creditor by far.
7. Consolidate Debt:
Sometimes your debt might be a little more manageable if you take out a loan to pay your debt. It gives you one bill that you need to pay and usually, this loan will have a smaller interest rate.
You can also get an extended payment plan and lower payment options if you go this route as well.
8. Stop Using a Business Credit Card:
If you’re using a company credit card for your expenses then stop. Just like with a personal credit card, using it while you’re in debt will just make things much worse. You should pay in cash instead if you can.
If you carry cash then you’ll just pay for the things that you can afford and it will stop you from adding new debt on top of the ones that you already have.
9. Hire Your Spouse:
This might sound a little unethical but you can hire your spouse. You can pay your spouse a little less then you would an average employee which means you can save your company a little money.
Your spouse will have to be willing, and it might hurt the financial status of your household but it can help your company in the long run.
10. Get a Second Job:
If you’re really having a problem paying off your debts you can get a second job to help you pay it off. You might be really tired for a while working another job while also running a company, but it’s better than the alternative.
The second job doesn’t have to be anything permanent or even full time, it just needs to be enough to give you a little extra income.
If all else fails and you need to bankroll your business while you’re in personal debt, you can learn more about it in this news article.
Business Debt Relief Tips to Get You Out of the Red:
Going into debt can be stressful but it isn’t a death sentence. Use these business debt relief tips to get back on your feet and start bringing money back in your wallet. Your doors don’t have to close unless you let them.
Did you know you could protect your finances by insuring your assets? Visit our blog to find out how.
When you are in debt, your mind is not open to concrete suggestions, nor does it alert you when it comes to debt collection. However, one trick that every lender should look out for is ringless voicemails. Banks, debt collection agencies and other loan companies use ringless voicemail debt collectors to get their work done. As a lender, you should keep an eye out for such voicemails in your inbox.
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