Pull your business out of commercial debt by following the few simple steps

As lenders are getting strict with lending loans to commercial borrowers and with the rise in the prices of health care materials, there are too many small business owners who are struggling under the burden of debt. Few months back, more than 8400 businesses all over the nation filed for bankruptcy and this number saw a 58% increase from the same time a year back. Bankruptcy is definitely one route that the small business owners take in order to save their companies but this move comes with a costly price. You not only damage your credit score (check out 24Cash Bankruptcy Guide to know more on rebuilding credit post bankruptcy) but also earn a bad reputation among your peer companies.

If your business is drowning deep in debt, check out the few simple steps that you can take in order to pull your business out of it.

  • Take a backlog of the debt your business has accrued

Jot down all the debts and make a list of the monthly installments and interest rates. Payments on business lines of credit, loans and other credit cards as well as the due payments of vendors should all be taken into account. If you’re confused about the debts that need to be tackled first, you can follow this procedure. First-time business owners should repay all their debt within the initial 12 months of starting the company if they wished to reduce the risk of bankruptcy.

  • Watch out for ways of increasing sales

As soon as you’re ready with a debt management plan, you can thereafter plan out ways of increasing your sales. How about increasing customer satisfaction and retaining customers through a loyalty program? Around 85% of the people reported that they prefer shopping from a store that offers loyalty program. You can stay active on social media to remain engaged with the customers and to know about their opinions and recommendations.

  • Try cost curbing

You can bring in enough revenue by boosting sales but in case your expenditures are soaring out of control, you can cut them off by selling off equipment, downsizing to a smaller space or relocating to your home office. Watch out for people who own similar businesses and try splitting costs with them. You may even go to the extent of sharing internet services and even employees.

  • Refinance debts with high interest rates

When you’re not able to repay your debts in full, consider refinancing or consolidating them by taking out a bigger loan from online lenders like 24Cash. However, this is only possible when you have good credit score. By refinancing, you can take out a low rate loan and use the proceeds to pay back your lenders. You can even consolidate business credit card debt into a 0% interest balance transfer card.

According to reports from the Small Business Administration, nearly 50% of businesses fail to perform to their optimum level during the initial 5 years and hence end up taking on too much debt. So, it is advised that you follow the above listed steps to deal with business debt and avoid filing bankruptcy.