Business owners have been wading through lockdown protocols for more than two years. Even if the economy has recovered somewhat in recent months, it is still not enough to undo the damage done by the pandemic. Small businesses are a significant contributor to India’s $2.9 trillion economy and the future looks bleak with reports suggesting 35% of small businesses could be shut down due to debt accumulated during the pandemic. But what can a company do in this difficult situation to pay off debt and regain good financial health? This article looks at some tried-and-true tips for getting rid of business debt faster while saving on interest.
1. Evaluate the debt
The first thing a business owner should do is understand the financial difficulties they are going through by calculating the debt ratio. If the ratio is less than one, it means the company is financially stable, while a ratio greater than one means the company has more liabilities than assets. Once the debt is rated, it’s easier to take care of. Debts with high interest rates should be dealt with first. Business owners can also consider debt consolidation to pay off debts with high interest rates by turning to a leading online lending company like KreditBee.
2. Integrate a budgeting method
After assessing the debt, the next step should be to create a viable budget and stick to it. There are many budgeting methods like incremental budgeting and activity-based budgeting that work well for small businesses. Budgeting limits waste and ensures the books stay balanced at the end of each year. Sticking to a budget can also result in excess funds that can be used to expand the business or pay off other debts.
3. Use available resources
There are many new software applications that are helping business owners reduce their expenses. Small business owners can save money on tasks like accounting, customer support, and marketing by using free software applications. Business owners can also turn to online loan companies to access easy online loans that allow them to repay with convenient EMI options.
When you approach your debt in a systematic way, you increase your chances of breaking out. At KreditBee we offer low-interest personal loans with immediate effect. We are one of the leading online lending companies, partnering with established financial institutions to offer easy online lending to businesses and individuals. Contact us on 080 4429 2200 or email us for answers to all your soft loan questions [email protected]