Just like everyday people can accumulate major debt, businesses can also get in the red. And just like regular people, business owners can also seek the help of debt management. You can either do it yourself or look for a reputable credit counselor.
If you’re going to do it yourself, you need to look at your company’s finances. Are you hemorrhaging money in an unnecessary place? Maybe you can prevent going under and save some money by letting someone go. This could be a difficult decision to make, but then again making difficult decisions is what business leadership is all about.
Make sure you are making at least the minimum monthly payment on each personal debt, especially with the mortgage of your company’s building. If you have more than one debt, focus on the mortgage first because your business relies heavily on having a place to work. You also need to stay in contact with your creditors so they know you are being as expeditious as possible in paying back the debt.
If you can’t handle it by yourself, you should consider getting business debt management from a credit company. Just like with personal debt, you will be assigned a counselor who will assess your debts. The counselor will take the time to calculate the amount of debt you owe (if you don’t already know so) as well as the interest owed. If necessary, the counselor will contact your creditors and try to reduce interest rates on any company loans.
Once your counselor assesses your situation, you will get a few options to eliminate your debt. If you make business transactions with a credit card, you might be given the chance to transfer the account to a new credit card with a lower interest rate. You might also be able to get a consolidation loan to place multiple accounts into one account. Instead of paying multiple interest rates, you could save some money here by having to pay just one rate.
Another option would be to take out a loan on your property’s equity. If you purchased the building at a much lower price than it is now, an equity loan could help pay off a portion or all of your remaining debts. Of course, this is only a good option if your business’ property has gained in value, something that is hard to come by right now.
Managing your business’ debt is much like managing your own personal debt. The options are there to do it yourself or get help from someone who manages debt for a living. As long as you can maintain a healthy relationship with your creditors, you should have little trouble getting your company out of the red and back into the black.
He played clarinet for the Marching Tar Heels in 2005 and 2006. He also volunteered for STV, the student-run television station at UNC-Chapel Hill, in the spring of 2010. He shot video, wrote scripts, and acted for “Off the Cuff,” UNC’s longest running sketch comedy show. He has the rare distinction of having lived in a dorm all four years of his undergraduate college career. He was also on Franklin Street on the night of April 4, 2009. His future plans are to pursue a master’s degree in journalism and to one day work for the media as a sports journalist or broadcaster.
Being one of eight children, David realizes finance is an important topic to everyone, regardless of his/her knowledge of the subject. His interests are in personal finance, budgeting, and savings.
In his spare time, David enjoys watching sports and standup comedy, as well as doing crossword puzzles and writing in the first person. He also thoroughly enjoys trivia and, one day, hopes to participate on the game show Jeopardy!, where he will try to break Ken Jennings’ 74-game win streak.