2017 is a fresh start for you and your business, so why not take this opportunity to get your finances back on track. We all have good and bad periods, but let a profit loss go on for too long and you could be in big trouble. While you may need to borrow to keep the business afloat, you also need to be able to pay it back as quickly as possible, or it could spiral out of control.
Nobody likes seeing their accounts in the red. Follow this advice to make sure you work towards that common goal of paying off debt and aiming for business growth. If you’re in a downward spiral of lending, make 2017 the year you sort it out!
Cut and delay expenses
The quickest thing to do is immediately look at your outgoings and see what can be cut. When cost savings need to be made, you should be ruthless – if you can’t afford a staff member, unfortunately you need to let them go. There are many expenses you might be able to minimise, for example if you downsize your office or suspend the use of the company credit card.
Prioritise debt payments
You might have one or more loans which need repaying each month and it feels like an endless cycle you’ll never get out of. It is possible to dig your way out of debt, it just takes time and a good plan. Prioritise which payments are most important, and make sure you are freeing up enough cash to pay off at least a small payment each month. Some financial experts recommend the snowball effect while others will prefer to pay off debts with the largest amount of interest first.
Borrow the right way
If you feel like you’re not in a position to pay off debts and in fact need to borrow a bit more to get back on track, make sure you make an informed choice. A traditional business loan could have high interest rates that you cannot keep up with. There are various alternative finance methods which offer instant cash advances without the risk. These type of loans are based on your sales so you won’t be lending more than you can afford to pay back.
If the situation has gone on for long enough, then it may be time to seek help. A debt consolidation company can combine all your existing debts into one affordable monthly payment to get you out of the red for good.
If you need financial help, be sure to seek impartial advice.