Looking for some tips to help your business get out of debt? In this article, find 10 top tips to do just that…

Being in commercial debt will never be an easy ride. The stress of being in this sort of financial trouble, and then having to figure out how to pay it back, may be too stressful for some people to handle.

That being said, commercial debt recovery is totally doable with the right tactics. In this article, we’ll be taking you through 10 of the best ways to do this. So, if you’re struggling with money, you came to the right place…

1. Increase Your Revenue

The most obvious course of action, and one which might be easier said than done, is increasing your revenue. There are a number of ways you can go about this, including, but not limited to:

Charging more for your services
Increasing incoming cash through offering bulk deals
Selling off stocks tied up in the business
Creating a loyalty programme, rewarding customers for their long-term support
Promoting on social media
Narrowing your focus on what you can bill, rather than admin

2. Cut costs

To match nicely with increasing revenue, you could also cut costs to improve overall profits. Again, there are a number of ways you can do this, some more cut-throat than others, including:

Making staff redundant
Furloughing staff
Hiring staff on a part-time or contract basis
Cutting the usage of any unrequired software
Considering virtual events, rather than physical ones
Cutting advertising costs
Avoiding buying food and drink for staff in the office

3. Delay Expenses

Another big expenditure, which is avoidable and can be cut, is expenses. Whether you cut out any activities that require this, or simply delay paying them, this will help to boost overall available cash within the business.

Although it might seem as though cutting small expenses here and there will help, removing one large expenditure may be more effective. This could be something like a big event that requires a lot of attendees. Most events have resources that are sent to attendees anyway, so this might be a good way to avoid the travel expenses.

If cutting expenses altogether isn’t possible, you could opt for delaying them instead. For example, you could make a record of any staff expenses incurred and offer to pay them off later on in the year. You could also delay paying for certain goods and services you receive, for example if there’s a 30-day cut off for any invoices.

4. Negotiate Better Terms

Asking for an extended payment plan, lower interest rates, or smaller minimum payments on any outstanding debts you have could also really help. People on the other end of the phone are human, and you may be able to get through to this aspect of them if you plead your case.

5. Chase Customers

Some customers will do the best they can to avoid paying up, which is why chasing your customers for payment is a good way to get some extra cash flow. After all, you’ve provided them with a decent service so you should be reimbursed for this.

To do this, email each person one by one chasing them for the money. Then, if they don’t heed your initial email, give them a call. Keep calling until they pay – it’s as simple as that.

6. Sell Assets

Selling off any elements of the business that aren’t necessary could really help. This could be anything from expensive office furniture, to computer equipment, to physical products, raw materials, and inventory. Anything you can get your hands on that doesn’t bring anything necessary to the company should provide a decent bit of money.

If you don’t want to part ways with everything, you could always set up a “sale and leaseback” agreement. This is when you sell the equipment to pay the debt, and then immediately rent it out. This way, you can still make use of it, but pay for it month by month instead.

7. Consolidate the Debt

Consolidating debt is a little trick that helps people to manage the problem better. Having a number of different sources of debt can be difficult to manage, and might lead to more stress than it’s worth. Instead, you can take out a new loan, and pay off all the debt using this loan. Then, you just have one lump sum that can be paid off bit by bit.

This should really help you to psychologically deal with the problem; it’ll definitely feel like something more manageable this way.

8. Refinance Your Loans

The current debt plan you’re on may be fleecing you out of money. So, to deal with this, you could take out another loan instead which has better rates and interest.

To do this, you can apply for a new, cheaper loan, and use the proceeds from that to pay off your current debt. Then, all you have to worry about is this new loan, which should cost you less money in the long run.

The added bonus here is that it’ll look great on your credit history. Paying loans back quickly always helps here, so refinancing the loan will work wonders for this.

9. Consider Working from Home Full Time

COVID-19 has shown us that working remotely as a whole team is entirely possible. In fact, it may even work better, in some places, than working in the office!

Considering how much money an office space costs, it might not necessarily be as practical as it was pre-COVID. So, why not consider moving out of the office, or leasing a smaller one instead. This would be a huge sum of money that no longer needs forking out each month, and could allow you to pay off those increment debts much speedier.

10. Borrow

Finally, don’t hesitate to seek help from loved ones when you can. No one wants to see their friends or family falling into debt, especially if there’s a business concerned. So, why not try borrowing money off of them to cover the costs?

Your friends and family will unlikely charge the huge rates that loan companies do. Also, if you don’t manage to make payments straight away, they’ll be a lot more lenient. This should take the strain off a little, allowing you to think a bit clearer.

Ready to Get Out of Debt and Get Back on Track?

As you can see, being in commercial debt isn’t the end of the world. In fact, there are a number of practical ways you can ease these troubles, starting with the 10 we’ve listed above.

We hope this article has given you the start you need to get rid of those troublesome debts. Good luck!