Dealing with Small Business Debt
There are times where businesses have to deal with too much debt, but in some cases this is first necessary in order to succeed and only when the debt is managed.
However, when business debt gets unmanageable there are things you can do in order to save the business.
If you are not able to save your business with private funds then you need to determine areas where you are able to reduce costs. Maybe you have unused space that you can sublease or perhaps you have equipment that you are not using, which you can sell.
You can also reduce your workforce if you have to, even though this won’t be easy.
Contact Customers and Suppliers
You need to stay connected with your customers and find ways to increase your exposure and improve your business model. Perhaps you can offer customers markdowns if they pay you quicker for instance. Also contact your suppliers to arrange for discounts or to defer payments.
You will need to contact all of your creditors and explain your situation to them. You can make things worse if you ignore your lenders.
Ask lenders to work with you and see if they are willing to negotiate lower interest rates, restructure your repayments and increase your line of credit.
You can also outsource your debt problems to a debt relief company that will negotiate on your behalf.
You could consider consolidating your business loans into one payment. This could reduce your monthly costs without affecting your credit score.
Consolidating debts allows you to deal with one creditor and you may get a loan with a lower interest rate.