A Low Cost Approach To Managing Debt Better For Your Small Business

No-Cost Approach To Managing Debt Better For Your Small Business

If you’re a small business owner, chances are you’re already familiar with debt. You may be paying some of it off and most likely, you’ve also been hit with unexpected expenses.

However, another type of debt can be equally as damaging to your business: the unmanageable one. This is when you have too many debts and cannot get them paid off due to high-interest rates or other factors such as rising prices on your products or services.

In this case, there are several Approach To Managing Debt Better For Your Small Business so they don’t fall victim to unmanageable debt in the first place!

How to Get Out of Debt As a Small Business Owner

Before you start, define the problem.

  • Define your goals and what they mean to you. What do you want? How will this help with your business or personal life? If it’s debt, how much is too much for your business to handle? How much money do other people have in their pockets compared to yours—what does that say about them as individuals/businesses/communities?
  • Make sure you have a plan of action based on these questions before getting started. Don’t worry about what other people are doing or what others think about the solutions; focus on setting goals for yourself that are realistic yet ambitious enough so that when they’re achieved, there’s something left over for the next goal.

Calculating Your Debts

  • List all your debts.
  • Calculate the interest rate on each debt.
  • Calculate the total amount of interest you pay each year on each debt.
  • Calculate the total amount of money you owe on each debt.

From This, You Can Work Out The Interest You Pay Each Year On Each Debt

Interest is the cost of borrowing money. In other words, interest is a fee paid to the lender for loaning you money. It’s not a payment you make to yourself or anyone else; it’s simply an amount charged by lenders as compensation for investing their capital in your business venture.

Interest rates vary from one type of loan to another, but most loans will have an annual percentage rate (APR) attached that tells how much interest you’ll pay over time if you borrow N10,000 today and don’t repay this loan until its maturity date—when all or part of it must be repaid in full

Your Next Step Is To Pay Off The Most Expensive Debts First

The next step is to pay off the most expensive debts first.

  • Pay off the highest-interest debt first: This means making sure you pay down your high-interest loans first before tackling lower-interest loans or credit cards (if any). You may want to consider refinancing some of these higher payments if it’s an option for your business and budget, but doing so will depend on how much extra money is being spent now versus later on.
  • Pay off the debt with the highest APR first: You can think about this as paying off debts with higher interest rates first instead of last—and again, it’ll depend on when those bills are due! Suppose everything else was equal except that one bill had a 12% interest rate while another was 20%. In that case, I’d recommend prioritizing paying down that second bill over both other types and ending up with less total debt overall than if we’d just started by paying off all three at once (which would require us to take out smaller loans).

List All Of Your Debts In Order Of The Cost Of Borrowing From Highest To Lowest

  • For example, if you have an N10,000 loan at 8% interest and another loan for N20,000 at 12%, then the total amount owed is N30,000. The first loan has an annualized interest rate of 8%, whereas the second has an annualized interest rate of 12%.


Now Make A Budget To Decide Where You Can Cut Spending To Free Up Money

Now it’s time to make a budget. This will be your guide to figuring out where you can cut back, and how much money you’ll need in order to do so.

First, go through all your monthly expenses one by one. Be sure not to forget any costs that come up every month like rent or utilities, but also be realistic about what those amounts are going to be as well—you don’t want anyone else in the house feeling like they’re being taken advantage of because they didn’t realize how much stuff costs until after it was too late!

Next comes figuring out where exactly these expenses should fall within the overall budget. Once again: try not to overspend on anything just yet; if there’s something that seems too expensive right now but could still work out later on down the line then use this as an opportunity to increase its value by putting off the purchase until later instead!

Consider Reworking Some Contracts And Negotiate New Terms With Creditors That Are Fairer And More Affordable For Your Business

Consider Reworking Some Contracts And Negotiate New Terms With Creditors That Are Fairer And More Affordable For Your Business

If you have outstanding debts and are looking for a way to pay them off, it may be time to consider renegotiating some of your contracts. If the contract provides for a fixed amount of money that is due each month, but you can only afford to make payments at certain times (for example one month after getting paid).

Consider changing this arrangement so that when payments are made they go directly towards reducing or eliminating interest charges on loans. This will help save money over time while still giving creditors what they expect from an agreement between two parties who wish not only to do their best but also to do their part in helping each other succeed financially

Look Into An Overdraft Facility Or Secured Loan To Consolidate All Your Debts Into One Affordable Payment

If your business has a lot of debt, you may be able to consolidate all of your debts into one affordable payment. This can help you save money and make things easier for both you and your business.

  • Overdraft facility: An overdraft facility is a way to get cash out when there is not enough in the account to cover all bills at once. It’s usually set up through a bank or credit union, but some companies offer them directly to their customers as well. The fee charged by these services varies depending on how much they charge per transaction, but generally speaking it’s cheaper than paying interest on credit cards every month!
  • Secured loan: A secured loan means that instead of giving someone access to an asset such as real estate or stock shares without any collateral behind it as they do with most unsecured loans you put up something valuable like vehicles or jewelry instead! What makes this type different from other types is its ability secure payments for creditors until repayment occurs which could take years depending upon which type

Do not let your small business fall victim to unmanageable debt.

If you are a small business owner, it is important to manage your debt. Forecasting and planning for future cash flow can keep your business healthy and growing. While debt management is an important aspect of running any company, there are many things that can go wrong when it comes to managing debts and expenses.

The first step in avoiding this issue is knowing what kind of funds you have available so that you can make sure they’re being used effectively. The simplest way of doing this is by using a debt calculator tool such as those offered by Quickbooks Online or Payoff Calculator Plus! These tools will help determine how much money needs to be saved each month before any new purchases are made (so they don’t fall into default).


If you want to manage your debt better, then it is time to stop spending money on things that don’t make sense. Start by making a list of all of your debts and work out how much interest they are costing you each year. Then, look at ways to reduce the cost of borrowing from high-cost creditors so that you can free up money for investments in areas that will help your business grow or expand.