Business owners have been wading through lockdown protocols for more than two years. Even though there has been some reprieve with the economy recovering over the past few months, it’s still not enough to undo the damage that has been done by the pandemic. Small businesses contribute a substantial share to the 2.9 trillion Indian economy, and with reports suggesting that 35% of small businesses may shut down due to debts accumulated during the pandemic, the future looks grim. But what can a business do in this dire situation to pay off debts and reclaim good financial health? This article will look at some proven tips to eliminate business debt faster while saving money on interest.
1. Evaluate the debt
The first thing a business owner should do is to understand the financial trouble they are in by calculating the debt ratio. If the ratio is less than one, it means that the business has financial stability, whereas, if the ratio is more than one, it means the business has more liabilities than assets. Once the debt is assessed, it is easier to take care of it. Debts that have high-interest rates should be dealt with first. Business owners can also consider debt consolidation to pay off debts with high-interest rates by approaching a leading online loan company such as KreditBee.
2. Incorporate 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 which are well-suited for small businesses. Creating a budget limits wastefulness and ensures that the books stay balanced at the end of each year. Sticking to a budget can also lead to surplus funds which can be used for business expansion or to pay-off other debts.
3. Utilize available resources
There are many new software applications that help business owners to cut their expenses. Small business owners can save money on tasks such as accounting, customer support, and marketing by using free software applications. Business owners can also approach online loan companies to get access to easy online loans, allowing them to pay back using convenient EMI options.
Approaching your debt in a systematic way enhances your chances of breaking free. At KreditBee, we offer instant personal loans at low-interest rates. We are one of the leading online loan companies that work with established financial institutions to extend easy online loans to businesses and individuals. Reach out to us to get answers to all your questions about low-interest rate loans at 080 4429 2200 or email [email protected]