If you run a business & you have debt, rest assured that you aren’t alone. In a study, 36% of small business owners stated they were not comfortable with how much debt their organization carried. 49% stated they find it really hard to tackle their present debt.
While you might need to opt for debt at times to grow your business, ominous debt can actually decrease the delight of being an entrepreneur.
Listed below is a step-by-step guide to assist you to decrease your business debt, so you can get back your sanity & start concentrating on other critical tasks.
Prepare a new business budget:
You can’t get rid of debt by ignoring it. But in some instances, what feels like crushing debt is just unsystematic earning, or earning you have not optimized towards paying off debt.
So, the first thing you need to do is check your present numbers and prepare a new small business budget with the help of a small business accountant in Scottsdale.
Choose a debt-reduction strategy:
The best approach to pay your business debt will rely on how much you owe, your present cash flow and of course your willpower.
Two typical debt reduction strategies you can follow include the Spartan strategy and the percentage strategy.
Prepare a “get out of the debt” timeline:
With your budget & debt reduction plan in place, you can calculate when you will have paid off all of your debts.
Consolidate your debt:
Debt consolidation works wonderfully for businesses with more than one small business loan, resulting in high interest or excessive debt payments every month. To ensure you maximize this strategy, it is recommended to seek advice from your small business accountant in Scottsdale prior to consolidating debt.
Appoint a debt restricting company:
If restructuring your small business debt is out of your reach, think about collaborating with a debt restructuring company. For a fee, they’ll negotiate with collection agencies & creditors from your side to extend or change your existing credit agreements.
Keep in mind it is absolutely normal to feel overwhelmed when you are struggling with small business debt. The best way to get rid of this is to choose your favorite debt-reduction ideas from this post & commit to a plan to make it happen. You can always work with a small business accountant in Scottsdale from Foster Financial CPA to make your debt reduction strategies more effective. Feel free to give us a call if you think we can lend you a helping hand during your financial crisis.
Tax Tips for the Self-Employed
Small Businesses Are Expected To Get More Audit By IRS in 2021
Everything You Need To Know About Form 1099-NEC
An Overview of the Net Operating Loss Tax Provisions in the CARES Act
How To Decrease Your Small Business Debt? A Step-By-Step Guide