Debt Tips for the Small Business
Loans and debt are a part of every business. To the small business owner, these can sometimes be overwhelming and stressful. Here are a few tips to help ease this process and align your business in the correct manner.
1.) Know how much you owe
Having accurate numbers will make your payment projections much easier to calculate and anticipate. Without accurate numbers, this process will be much more difficult to plan for.
2.) Don’t hide if you fall behind
Receiving collection calls can be a very stressful process, but screening these calls will only make the process worse.
3.) Know and understand your liabilities and exposure
This may sound obvious, but read the fine print. As a business owner, you need to understand all of the agreements and contracts you’ve signed. Get to know the terms they contain, the exposure they give you personally, and the guarantees they add in. Pay special attention to debt and agreements with co-signers.
4.) Learn about the different stages of collection
Not all collection efforts are the same, and understanding the processes and stages involved in these efforts will help you assess the urgency and steps you need to take.
5.) Prioritize your creditors accordingly
As not all collection efforts are the same, neither are all of the creditors you may owe. As a business owner, you need to determine which creditors are more vital and pay those first. Vital creditors are the ones you can’t operate your business without.
6.) Don’t make promises you can’t keep
Payment plans can easily stretch you as a business owner. To keep this from happening, make these plans based on promises you know you can keep long-term. Breaking a payment plan will compromise your credit and even make the resolution process much more difficult and costly.
If you are past due with any creditors and have yet to develop a plan, feel free to talk to any SBDC advisor and schedule an appointment for help.
If you need help with paying creditors, obtaining a loan, or avoiding bankruptcy; feel free to contact “Corporate Turnaround”.