At various points in business, you may find yourself facing tricky debt obstacles that need to be overcome. During these challenging times, it’s easy to feel overwhelmed and like you may not make it through, but with the right practices in place, you can usually overcome whatever hurdle it is that you’re facing and get back on track to business success.
Furthermore, you will learn from the experience and in the future, you’ll be more likely to recognize the signs that a hurdle may be on the horizon and better know precisely what you need to do to side-step it.
So what are some of these hurdles and what can be done to overcome them?
If you suddenly feel like you have bills coming in from everywhere and not enough funds to go around to pay them all off, there’s no doubt this will be impacting your stress level.
If your current bills account for more than 50% of your company’s profits, you need to start looking into debt consolidation strategies to simplify management of these loans and centralize your payments.
In addition to that, you need to immediately keep a tighter rein on spending and make sure that you are only paying in cash or debit and not using credit at any point unless it’s an emergency.
Additionally, be sure to cancel any subscriptions you have that aren’t necessary and start looking for other ways to cut back on overall spending.
Trouble Obtaining Financing
In other cases, the problem you’re facing may be an inability to obtain appropriate financing that you need.
With banks becoming less and less lenient to lend businesses money, this is a hurdle many are facing. Banks look at a number of things including credit history, balance sheets and equity contributions. Once credit checks are passed you must also guarantee that any loan you are granted will be repaid. In this case, you’ll want to look into secured loans and consider using some of the company’s assets as collateral. Be aware that this means they can be seized.
In addition to this, you may also want to check out whether you would be eligible for any small business grants that would help you secure financing. To do this, you need to make sure you have a comprehensive business plan, see which grants would be the most suitable and appropriate for you, and put together a grant proposal.
Knowing What To Pay First
It can be difficult to prioritise your debt payments in terms of which ones you should be paying off first.
It is a good idea to pay off secured debts first as defaulting on these ones comes with greater consequences. It can seem like common sense to prioritise your biggest debts, however paying off your smaller, more insignificant ones first will prevent them from getting any bigger and out of control.
If things seem out of your depth and overcoming certain obstacles impossible, it might be a good idea to seek out business debt specialists or a licensed insolvency practitioner who will look into your individual business case and find the best solution for you. You might be able to rescue your business and get it back on track if the right help is sourced.