You may come across time in your business career when you would need more money to clear your creditors’ dues and stop all the collection calls. You may face such a time due to poor management of funds, misuse of business money for personal use and much more. If you do not have the steady cash flow to cover all the basic expenses of your business, then you may also become bankrupt. If you know the methods to make repayments to your creditors and also to make the basic payments like rent and salary then it can help you a lot in this matter. Restructuring of debt is the key to being proactive and formulate effective measures for repayment.
Control Your Expenses
When you consider your budget, you will find that there are many areas which seem to be unnecessary given the current problematic financial situation. You can take help of your accountant or take help of a business consultant to find such unnecessary areas. When you find so, make it a point to stop making such spending limiting it to only operational expenses. This would reduce your expense to a considerable extent and your cash flow would increase. Expenses like membership fees, donations, subscriptions may not be helpful at the moment and must be curbed at once but watch on those expenses curtailing which may adversely affect your business.
Contact The Creditors
Your creditors at times can also help you in several ways to increase your cash flow. You can talk to them and ask for some more time for payment and might also reduce the rate of interest. You have, to be honest at all times and explain them about your hardship; have a strong letter along with proof of hardship, your plans, along with all relevant documents like taxes returns, balance sheets and much more to substantiate your claim. At this point, if you find some difficulty then you can consult some professional counselors for debt restructuring.
Increase Your Cash Flow
If slightly rework your budget you can increase your cash flow and make an effective plan of action to clear your business debt. You can also increase cash flow with increase in sales, offer markdowns and discounts to increase revenue. If you contact your regular customers and push for more payment and pressurize those who are regularly late in payment, you can increase your cash flow as well.
Prepare Yourself Well
If all fails, then you can take a loan to clear your dues but remember that every loan has pros and cons. Some are easy to avail while others require a lot of papers and documents. You may find that there are innumerable applications for prosper loans but all of these do not get accepted. You have to consider all the points so that you get the best loan to clear your business debt on time. There are few dos and don’ts which would help in your loan approval. You have to research well to understand the fine prints, rates of the loan and judge your financial condition before you apply for loan consolidation.