5 Smart Ways To Help You Settle Business Loans Quickly!
Summary: Is your business running in losses? Are you losing your investors because of the debt? Do you want to take your small business out of debt?
Rising interest rates and high corporate debt levels are giving sleepless nights to lots of investors and small business owners. It is impossible to predict the future, and with the latest happenings in the world, the period of consistent declines in the GDP of India, it is challenging for small business owners to run their business operations with the guidance of an expert.
Though most entrepreneurs begin their startup by arranging funds through debt funding, equity funding, loans, or other less formal sources like friends & family, the experience of being in debt can be scary and overwhelming. To avoid making drastic mistakes at the initial stage, many entrepreneurs also hire the best business coach in India.
If managed smartly, borrowing funds can help you accomplish your goals; if mismatched, it will affect your financial well-being and cause mental stress, especially to small business owners that are worse affected due to the Covid-19 pandemic.
The Indian government launched many loan schemes to offer relief to MSMEs in subordinated debts, collateral-free loans, and equity infusion through its Fund of Funds (FoF) scheme in 2020. This scheme proposes to purchase up to 15% growth capital in high-credit MSMEs.
You can work with a business coach who can help you manage funds more efficiently. Also, if you have a well-thought financial plan, you can solve the cumbersome process of taking your business out of debt, just like others. Here is how you can chart your way out of debt:
1. Reorganize the Debts
The first step that will take you closer to managing your debt is to organize all the details of precisely what you owe. Make a list of your debts with EMIs, interest rates, and tenures. This will help you recognize the costliest obligations.
2. Pay Urgent & Costliest Debts First!
After sorting out your debts, pick the costliest one! If not paid on time, expensive debts will extract the highest interest. This can drain your finances. Hence, settle your costliest debts on a priority basis. Take help from the best business coach for strategies that will help you pay your debts.
3. Make Monthly Budget
One of the most vital debt management techniques is planning a monthly budget! Make a list of your income & expenses while deciding on your monthly budget. This will allow you to think about ways to reduce your daily expenditure. Having details of monthly cash flow can help you save money that you can use to clear your debt.
4. Consolidate Loans
Sometimes keeping track of all the loans can be difficult. If you have too many loans, it can be a good idea to consolidate them into one. This will leave you with just one EMI. Business loans, personal loans, and credit cards provide you with this option. It will remove various debts and leave you with just one loan to track. Consult with a business motivational speaker today to understand your finances.
5. Protect yourself Against Economic Shocks
The future is uncertain, and it is wise to protect yourself from uncertainties you might be exposed to. For E.g., a loss of a job could lead to delayed EMIs. So, to avoid such situations, create an emergency fund to help you sustain yourself during a bad phase. Ideally, this fund should be 3-6 times more than your current monthly income.
Repaying loans is a moral, legal, and also a financial obligation. With intelligent and effective debt management strategies, you too can get your business out of debt. Learn how to manage your debt with the top-industry leaders from our Problem Solving Courses.