These are difficult times for business. Small businesses, in particular, are suffering during the cost-of-living crisis, with 69 per cent saying that financial worries are impacting their mental health. However, there are ways you can lower the debt your business owes. Below, we explore how you can get your business out of debt.
Consolidation or refinancing
One option, if you have several loans out, is to consolidate them or refinance your loans. Consolidation refers to the process of turning all your loans into one big loan with a lower interest rate. This can make your debt management much easier to live with and control. Meanwhile, you can also attempt to refinance your loans if consolidation isn’t an option. Or you can use debt recovery London.
If your business is facing financial challenges, one of the ways you can get your business out of debt is by seeking professional guidance. Check out this debt advisory London services to explore effective strategies and solutions for managing and reducing your business’s debt burden.
Reduce expenses
Reducing expenses is an effective way to get out of debt too. You should still pay all your essentials such as your payroll, debt and stock acquisitions. But you can trim your budget by negotiating the price of products and services or by cutting any unnecessary luxuries.
Seek government support
Alternatively, you could look for government support. Following the pandemic, there are various grants and schemes to help companies that suffered during this time. By liaising with your local authority, you can investigate whether your business is eligible for government support. A grant can go a long way to helping you out of debt.
Increase revenue
Another option is to try and increase your revenue. This is often easier said than done, but by increasing your working capital in the short term, you can try and increase your revenue. One option to facilitate this is by running special sales to stimulate interest from consumers. On the other hand, if you have a particularly popular product or service, you could raise the price to try and boost your profit margin.
Cut costs
You can also try escaping debt by cutting your costs. One way to do this is through a zero-based budget. With this, you’ll be budgeting by justifying and approving all expenses for each accounting period, rather than basing it on your past spending. This can allow you to analyse whether you truly need to make each purchase rather than just basing it on precedent.
If your business is in debt, then any of the options above can help you find a way out. However, sometimes it can feel as though you’ve exhausted every option. In this situation, you can try working with experienced tax and audit consultants to help put your company on firm ground once more. By doing this you can pull your company out of debt and look toward a brighter future.
