5 Ways to Manage Your Startup’s Debt

It can be difficult to run your business on a daily basis, while planning for growth at the same time. There’s a certain truth to the saying that you’ve got to spend money to make money, but if you can’t cover your expenses every month (i.e. rent, payments to suppliers, salaries, etc.) you’re going to find yourself in some serious hot water.

Even if you’re doing everything right, loans and debts are an almost inevitable part of running and growing your own company. The question is, how can you manage your debt so that it doesn’t spiral out of control? 

The key is to be intentional and take charge of the situation from the very start.

Get Free Quote: Money for your business without the hassle with Rapid Finance

Here’s how to get a plan in place that keeps your company’s debt manageable

1. Stay organized

It’s easy to picture your debt as one big, messy cloud, looming over your business. When you break things down into individual debts, everything will feel so much more manageable. Make sure that you know exactly who you owe, how much and when payments are due. Then, you can start to prioritize and plan.

2. Always review your cash flow

If your monthly income and expenditure have become unbalanced, take a step back to look at where the extra expenses are coming from. Then, you can adjust your budget to plan for the future without compounding your debt further. 

3. Cut unnecessary costs

Clear your debt more quickly by identifying areas for potential (and fast!) savings. Do you have any unnecessary expenses that aren’t exactly necessary to the running of your business? 

For example, are you paying for subscriptions or leasing equipment that you could live without for a while? Or, can you attempt to negotiate lower rates or deals from suppliers, or get better rates by switching suppliers? You could even think about joining with other small businesses to order in bulk, for better value.

Rent is likely to be one of your most significant costs, so it’s worth considering whether you can downsize your workspace, even just temporarily, to a coworking space. You could also explore the option of sub-letting some of your space to another individual or small company to make some of your money back.

4. Increase your revenue

Boost sales in the short-term by running special promotions or discounts on your most popular products or services. If you have any unpaid or outstanding invoices, be sure to chase those down. Moving forward, consider offering a discount to those who pay upfront so that your accounts receivables stay healthy. This will allow you to make bigger payments each month and clear your debt sooner.

5. Work out a payment plan

Oftentimes, creditors are open to putting a (realistic) plan in place that allows you to clear your debt. The only way to find out if this is an option for you is to open the door to the conversation, and assure that you’ll both get what you want out of it.

Some credits might offer flexible repayment terms, such as extending your loan over a longer period of time, in order to reduce your monthly payments and accumulating interest. You might also be able to work out a loan consolidation, which groups several loans together into a single monthly payment. This is much easier to manage and incorporate into your budget – and much less intimidating!

Sign Up: Receive the StartupNation newsletter!

The bottom line

Be proactive, and be strategic. It’s not necessarily about stripping your costs down to the bare minimum in order to clear your debt as fast as possible. It’s all about managing your company’s finances and structuring your debt in a way that is smart and sustainable. 

You want your business to grow and thrive, and that doesn’t come cheap. But, with some strategic planning and negotiation, your business debt doesn’t have to hold you back. Rapid Finance offers fast decisions and can deliver a variety of financing solutions within three business days. 

Previous Article
main street

Main Street Entrepreneurship is Thriving: Here’s Why

Next Article

Why Empathy Makes Your Customers Love You More

Related Posts
the rigbt software
Read More

The Right Software is Essential for Your Evolving Business

You started a business with a great idea, but when it comes to scaling it up with speedy and effective execution, you need something more than the average spreadsheet and software that only meet your business’s primitive needs. Often, business owners make the mistake of sticking to outdated software which hinders growth and profitability. Business...
employee experience
Read More

Employee Experience: Culture, Involvement and Career Development

Businesses focusing on customer experience is a given. After all, no business will thrive, or even succeed, without the support of the market it seeks to capture. But ensuring customers remain happy with your products and services is not the be-all and end-all of effective business management. Or at least it should not be. An...
wjr business beat
Read More

WJR Business Beat: New Grant Opportunity for Small Businesses (Episode 323)

On today's Business Beat, Jeff discusses a new grant program designed to provide support for underrepresented small business owners. If you quality, apply now! Tune in to the Business Beat, below, to learn more about the $1.65M initiative from American Express and Main Street America:   Tune in to News/Talk 760 AM WJR weekday mornings...
work from anywhere
Read More

Why Working from Anywhere Matters from Dell

Where work or learning physically happens no longer defines the user experience. Fueled by an appetite for digital experiences and capabilities, we’ve clearly entered a “do anything from anywhere” world, creating limitless potential for borderless innovation and flexible collaboration. Now that remote and hybrid experiences—where team members shift between performing remotely and on-site—have become standard,...