Managing a business is tough, managing a business’s finances is even tougher and sometimes no matter how much experience you have or how qualified you are a little business debt management help is needed.
If your business debt is starting to spiral out of control, take a sit down with a spread sheet and a highlighter pen, and figure out where you can cut costs. Can you find cheaper office space to rent? Are there any unused assets that you can sell on? Or, as a last resort can you reduce your staff size? Cutting down on staff may be unbearable but sacrificing a few to save the rest can sometimes be the lesser of two evils.
The last thing you want is your creditors ‘calling their debt in’ and ‘taking your business under’ with it. Communication is key here, talk to them and explain the situation, they will appreciate your honesty and if you keep them informed on what actions you’re taking to resolve the situation they will more than likely continue to provide credit whilst you solve the problem. It is in everyone’s best interest that you work your way out of whatever financial difficulty you’re in, your creditors may therefore offer you alternative payment options or a lower interest rate.
Contact Suppliers and Customers
Again, it is important that you keep all lines of communications open here and explaining to suppliers may help with payment options or to reduced rates. Opening up a conversation with customers could provide some inspiration to an alternative business model, or tighten up on payment options. Your current process obviously isn’t sufficient, so although the conversation may not be what you want to have with your customers, you do need to come up with a solution.
Consolidating all your business loans in to one manageable loan can ease your cash flow, rather than paying many creditors at alternative intervals you can combine all your creditors’ loans in to one, and even reduce your current interest rate. Consolidating loans and contacting creditors can be stressful and time consuming so it is often better outsourced by a Business Debt Management agency. They can contact your creditors for you and even negotiate a better interest rate on your replacement loan.
Bankruptcy is a last resort for any company that thinks it can no longer cope with the amount of debt accrued. Declaring bankruptcy doesn’t necessarily mean that your business will cease to exists; if your businesses assets are less than the amount of the debt, declaring bankruptcy may allow you to pay only what the assets are worth. The process is long, drawn out and complicated and must be handled by a professional bankruptcy lawyer.
If you find that your business debt is fast spiralling out of control and need a professional to speak with, to look at the business objectively and offer advice then visit business-debt-management.co.uk
Author Bio: Leah Jarratt is a regular guest writer for Business Debt Management, lightening the burden of business debt.