As commercial lenders are tightening their reins on borrowers, the prices for doing business are on the rise. Small business owners like you, might be drowning under a sea of debt. According to recent reports, last month around 8445 business organizations filed bankruptcy protection, not being able to cope up with their debts. Bankruptcy should bethe last option you consider, because as you know – this can spoil your credit record as well as your reputation.
Though business debt consolidation firms are there to help you out, you should always try out some DIY debt relief steps first. Check them out.
Curb costs: When your business is in debt, you should identify the parts that specially got you into debt and attack them directly. If you find out that the customers aren’t paying you on time, you should call them and tell them about the importance of their cooperation. With extreme cases, you can even turn over the accounts to the debt collection agencies so that collection efforts can easily help you recuperate the funds. Free up cash by selling off the equipments that are lying unused.
Formulate a budget: If debts keep on piling up, you should revisit your budget so that you can point out the problems that are working against your company. Ensure that the revenue that your business earns can always cover up the fixed utility bills and the rent costs that you have to pay. You should make sure that your business debt doesn’t keep piling up despite following the budget. Evaluate the budget at the end of the month so that you may change things as per monetary requirements.
Negotiate with your creditors: If you’ve been avoiding getting help from your lenders, it’s not a good idea. They’re the ones who can help you get the best terms and conditions on your loans so that you can repay them easier. Unless you let them know about the financial hardship that you or your business is facing, and what is barring you from making timely payments – how will they understand your needs? Speak to them and do what’s necessary.
Try out business debt consolidation: When you find your business debts spiraling out of control, you may even try consolidating your debts by taking out an unsecured debt consolidation loan. The loan will carry low interest rates and you have to make a single monthly payment towards the loan in order to become debt free. This way you may be able to save a considerable amount of money in a particular month.
So if you or your business has racked up piles of debt due to poor financial decisions – or even just the state of the economy – you need not worry too much because there are so many business in the same boat. Get in touch with a commercial credit counselor or try out debt consolidation to avoid filing bankruptcy.