How to Get Rid of Business Debt and Run a Debt Free Small Business

Are you trying to learn how to get rid of business debt? Read this article to learn how to get rid of debt and run a debt free small business.

The U.S. corporate debt stands at $15.5 trillion, which is 74% of the GDP. While a loan is essential in starting and expanding a business, too much debt can cripple your company. Most small businesses are still in debt, whereas others keep borrowing to stabilize their firms.

If you’re trying to get rid of business debt, you are in the right place. Check out this article to learn more about how you can do away with debt and run a debt-free business.

debt management

Raise Your Revenue

For your business to forge forward debt-free, you need to pay the existing debt. You can only manage to pay if you have more money, which you can raise by increasing your revenue. Some of the ways to grow your business earning include creating promotions, exclusive sales, or having coupons to attract more customers.

You might also want to boost your sales through social media marketing. Once you have gathered enough clientele, have offers such as volume discounts that will enable you to raise your prices without turning away customers. The additional income can help you clear the loans gradually.

Debt Consolidation 

Debt consolidation involves taking a new loan to help in paying other smaller loans. This approach enables a business owner to pay the business debt through a single monthly payment. Debt consolidation allows you to settle debt faster, and it can save you money as the interest rate reduces.  

If you’re thinking of consolidating your debts, Debt Hunch is a great place to start. You’ll get the ideal debt consolidation solution for your business. Within a short time, you’ll enjoy a debt-free company.  

Create a Realistic Budget

You can get rid of debt effectively once you understand your financial situation. Review your business budget and establish how and where you’re spending money. A realistic budget helps in the identification of income, costs, and other expenses. 

With the budget, you can assess areas that you’d want to adjust. A budget allows you to have a practical action plan towards debt-elimination. 

Prioritize the Debts

Small businesses in the U.S. had a total outstanding loan of $614 billion as per the June 2016 SBA Report. Over the years, the rate of taking loans from different lenders has sky-rocketed. If you have more than one loan, it will help to prioritize the debts.  

Start by determining the critical debts that have the possibility of collapsing your business. It is also advisable to consider a business debt that can have adverse implications on your relationship with vendors or other stakeholders. The penalties and rates are other factors to consider when prioritizing your debt.  

Business Debt Can Have Negative Impacts on the Growth of Your Business 

Taking a loan to finance your startup is a good move. Yet, piling up business debts is one of the easiest ways to cripple your company. If you have business debt, it is high time you followed business advice on how to operate debt-free. 

If everything fails, you can sell your business or file for bankruptcy. However, with the several tips listed, you don’t have to get to these lengths. 

Keep exploring our site for more business-related articles. 

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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