Some tips to manage your debts smartly

There is no business which does not go through hiccups of financial crunches at times. Every business has to take business loans at times either at the startup or later during management and expansion. And, the result of debt often is not that good for business. Many businesses have to go through rough waves of debt management from time to time. There are tips, however, to manage the situation and get through. Efficient debt management is the way to success in a business at any stage.


The three most common forms of business debts

The most common forms of business debt are business loans, a line of credit, and a business credit card. Each has their own way of application, processing, and repayment. And each has their own interest rates applicable. When you are taking a business loan, you may choose among them generally:

  • Business loan- business loans are applied mostly by businesses of all sizes. The business of any size can apply for this, and if you have a proper loan application file and presentation prepared for the process, then you can get this easily. The creditor will check all details and approve the loan after that. The tenure of the loan and rates of interest may vary from one creditor to another depending on the source you apply to.
  • A business line of credit- the line of credit is another system of taking a loan. If you have any property or asset to mortgage, then you may get its valuation done by the creditor to keep it as a mortgage line of credit. The creditor then approves it as a lump sum amount against that collateral, which stays as a credit limit approved for you all the time. You may raise that whole fund or some partial amount as and when required, and then when you get enough money to pay it back, you can pay it back. As and when you raise some part of the line of credit, the remaining unused amount is left in your account, and when you pay it back, the credit limit again rises.
  • Business credit card- the business credit card is another smart system to withdraw funds as and when required. Business credit card means a lot to entrepreneurs. Such cards offer a big credit limit, and also offers flexibility. You need not apply for a loan each time. You can use the card as and when required, get funds, and then payback slowly by maintaining some minimum requirements like paying a much-required minimum amount each month.


Business debts can be sorted and handled in a systematic manner. For this you may follow some of these tips below:

Debt inventory

Making a debt inventory is a wise step and the first step in business debt management. When you have too many debts, keeping track of them itself is a big job. Often many debts do not get paid on time even if you have the money to pay them, just because of the lost track of debts and their payment dates. This can be managed well with managing the inventory. Here you need to list the amount of debt, the source of debt, the types of debt, the interest rate, the tenure, the EMI per month, and the date of payment each month, and also the mode of payment and such details. This will help you keep track of things. You will be able to prioritize which loans to pay first and clear faster. You must aim to clear the loans fast within a year if possible, for the business to run better.

Resource sharing

Sometimes sharing resources with other similar businesses can help you reduce cost and save more of your revenue to pay back the debt in a healthier manageable way. Like if you were using a warehouse, then you may rent a shared warehouse where the rent goes into a reduced shared basis. Along, the Warehouse management system will help you cut the cost, and save better, and ultimately pay back better.

Focus on increasing sales

Revenue of a business come from sales. If you are getting enough sales, then you can easily pay back your debts. And to pay back debts on time, you must collect the revenue on time, and focus on increasing revenue. Important steps like connecting to more people on social media, and marketing more online, and also offering rebates and special discounts, etc., and also some loyalty programs, etc. can help boost sales a lot. If you offer bulk discounts on your products, you can get a great reward in the form of increased sales.

Save more by cutting costs

Cost cutting and running the business more economically with the reduction of unnecessary expenses is a great way to save funds, and use them to pay for the debts. If you save now and cut costs now, then you will be able to pay back the debts on time, and later you may go into the luxury mode and introduce these features later into a debt-free business model.

Sell off the unwanted

If you have unwanted machinery, infrastructure or equipment, then you may sell them off for the time being to pay for the debt. It can help you raise money to pay back the debt on time, and you can become debt free sooner.


Refinancing is a better option in many cases. This is also called debt consolidation when you are dealing with multiple loans. When your business has many debts, and you want to lower the rate of interest of all of them to pay a much lower manageable amount as EMI each month, then consolidating the debt is the best idea. You can do this if you apply through National Debt Relief for some good debt relief plans and solutions.


You can get a much lower interest rate and manageable single debt to pay when you consolidate debt. This is often a good way to manage business debt, and you must try it before you get too overwhelmed with debts.