Trending Now

4 Ways to reduce small business debt

Are you in the process of paying down debt on your small business? Maybe you’ve had to turn to your charge cards or maybe you had to take out a business loan to fund your venture. Either way, you aren’t alone – 88 percent of small businesses carry debt.

In the long run, debt can hold back your small business. The majority of business that fail cite cash flow issues as the reason. This is why small businesses can benefit from using strategies to reduce this debt, allowing capital to go to business growth. Take a look at these four ways to reduce small business debt.


Evaluate your spending

You need to know exactly what you’re spending your money on – much more than a vague idea of your monthly expenses. Take the time to figure out a detailed breakdown of everything your business purchases. Don’t go by the adage “you need to spend money to make money” and get careless with your cash. When you have debt hanging over your head, it’s time to cut back on the things that aren’t necessary and only purchase what you need for day-to-day operations.


Revamp your budget

Once you’ve eliminated those unnecessary expenses, it’s time to review your budget line by line to figure out how much cash you can put toward paying off your business debt. It will help to make a spreadsheet with your remaining expenses and rough income for each month. You can also reevaluate your product or service pricing to ensure you have a solid profit margin.


Commit a certain amount of money to put toward debt payment and place that on the spreadsheet as an expense. Don’t tell yourself you will just pay what you can and make it an option. Instead, make a specific plan so you’ll follow through. In the meantime, continue to use proven tactics to increase conversions so you’re still generating a profit.


Consider debt consolidation

Debt consolidation loans reduce your monthly payments and can provide some relief if you’re paying multiple creditors. You may also be able to obtain a lower interest rate. When you consolidate your debt, you’ll make a single payment each month so it’s easier to manage your bills and less likely you’ll miss a payment.


Keep on going

A major mistake small business owners make when they have debt is slowing down and becoming stagnant. Continue to still take some risks and don’t avoid everything due to fear of further debt. Calculated risks can result in an increase to your monthly revenue and actually help you pay off debt faster. Keep on trucking and remember not to lose sight of your business goals.


An important part of paying down your debt is coming to the realization that you cannot continue what you are doing. If you aren’t lowering your debt, your interest charges will continue to rise. The first part of repairing your financial situation is to find the best debt-reduction method that fits your needs. Once you make a plan, it’s only a matter of dedication and commitment to sticking with those methods and paying off your debt.


Megan Totka

Megan Totka is the Chief Editor for, which helps small businesses grow their business on the web and facilitates connectivity between local businesses and more than 7,000 Chambers of Commerce worldwide. She specializes on the topic of small business tips and resources and business news. Megan has several years of experience on the topics of small business marketing, copywriting, SEO, online conversions and social media. Megan spends much of her time establishing new relationships for, publishing weekly newsletters educating small business on the importance of web presence, and contributing to a number of publications on the web. Megan can be reached at

Join the Discussion

Your email address will not be published. Required fields are marked *

Back to top