Keys to Small Business Debt Relief

Nearly every small business begins its life with some debt. Small business loans and business credit cards are wonderful tools for turning your dream business into a reality. The dream can quickly become a nightmare though if you do not pay those debts in a timely manner.

Keys to Small Business Debt Relief

Growing your business is obviously a priority but you must balance that with your budget. Know what you owe and when it will be due and do not overextend your finances for the sake of adding accounts. Allowing debt to go unpaid will add interest so that over time any profit you may have made will actually be used to play catch up with your original debt. Make conscious decisions about how much you need to borrow, don’t just take the maximum the lender will allow.

Lower Your Expenses to Avoid Small Business Debt

Small business debt relief can begin with lowering your overhead. Spending less at the outset will allow you to keep more profit.

  • Make a budget for your business. Keep it realistic and include savings for unforeseen expenses. Stick to the budget as closely as possible.
  • Look for bargain office furniture. Sure it’s exciting to kit out a new office with shiny new stuff but that’s also a quick way to take an unnecessary bite out of your future profits. Look at each new purchase not as an attractive office but as hard earned money you’re sitting on.  Instead look for second hand furniture at yard sales, online or local charity shops. Also consider having employees share equipment, not everyone will need their own printer etc.
  • Don’t spend more on office space than required. Consider whether you will be inviting clients to your office. If not you can get small business debt relief right from the start by not getting more space than you need. Consider a home office if you can do most of your work electronically, if you will have just a few employees look into converting your garage, basement or top floor into an office.
  • Stay as paperless as possible. Save on paper, cabinets and someone to manage them by doing everything digitally. This is the new way of business everywhere.
  • Pay for services as you need them. Many small businesses do not need full time employees, especially in the beginning. Instead of hiring someone and paying them to sit in the office when things are slow consider using a website like or to hire professionals who work on a per task basis. They work from home with their own equipment lowering your need for space and stuff. Many talented individuals are ready to provide quality work when you need it and aren’t a drain on payroll when you don’t.
  • Check software before you purchase. Many programs can be downloaded for free, particularly those you do not use often or don’t need all of the bells and whistles for. You can usually get stripped down versions of more intricate programs at a lower price or free.
  • When choosing a business credit card choose on with a low interest rate.
  • Any time you make a significant purchase ask if you can get a discount for paying in cash.
  • When outsourcing any work get a few estimates. Just remember the least expensive can sometimes be more costly in the long run so take expertise into account as well.

Relief from Current Small Business Debt

If you have already incurred more debt than you are able to pay easily you’ll need some ideas for small business debt relief.

Consider a debt consolidation loan.

If you used a small business loan coupled with credit cards to get your business started but now find yourself unable to keep up with the payments it may be worth your time to look into loan consolidation. Make certain you get the lowest interest possible and consolidate all of your outstanding debts into a single monthly payment.

Talk to your creditors about debt settlement

Let them know you are in financial trouble and ask if you can pay a percentage of what you owe and consider the remainder of the debt forgiven. Make it clear that without this option you will need to declare bankruptcy and most of the time they will be willing to work with you to get back at least a part of the debt.

In many ways you should think of small business debt as you do personal debt. Stay aware of how much money you are taking in and adjust your spending accordingly while keeping in mind the amounts you already owe.

One of the best things you can do is to continue to keep your spending at a minimum even when business is good. Save something aside for a slow future season, a burst pipe, and an illness so that you don’t fall under in the future.