The pandemic response has changed the business world forever. While other crises have affected financial markets before, it’s likely a good time to feel better prepared for any issues so you don’t get blindsided.
To that end, it helps to look to advice on how to pay off business debt and get in a better spot now that business is returning to some semblance of normalcy in most areas. We’re here to share that advice in hopes that it will prompt you to adopt some techniques and feel more financially sound as the year progresses.
One compelling approach is to formalize a plan to reduce debt. The accountancy blog Bench addresses the two main strategies that business owners can adopt once they’ve come up with a budget.
Spartan: This calls for paring things down to the bare essentials and deciding what gets cut from the budget until the debt is paid off.
Percentage: You do the math and figure out what percentage of profits can be leveraged solely to pay off debt.
Additionally, the writers at Bench encourage people to come up with a timeline to get out of debt. This plan should include specific, debt-related goals that keep you motivated and act as checks to make sure your plan is on task and actually working.
An article in Nerdwallet makes the case for refinancing or consolidating your debts. Much of this depends on where you bank and your business’ track record, but it’s possible that a refinancing would lead to a better rate, better terms or lower monthly payments.
This is an idea that also extends to credit card use for business. Finding the one that has the least amount of interest and then transferring debt over might be a great option, depending on the mix of cards. Some lending institutions also offer a single small business loan to get your financial house in order.
Nerdwallet also suggests that you find mentors or free business resources to help you along the way. Many communities have small business development centers. Their professionals can offer advice and insight to help you stay on track. These groups, as well as trusted mentors, keep their fingers on the pulse of changing times in the financial world. In turn, they can help you navigate challenges and relish opportunities.
In your quest to save money or restructure budgets, you may need to look to additional resources. As one of your business partners, ARO can help you turn up the volume on profits through voice message campaigns or collection programs. To find out more about what we can provide you, visit our website.
