Business Debt Help & Advice
This type of debt is necessary as it is needed to cover startup costs such as equipment and office space. It is often taken on in the hope that revenue will become sufficient enough to cover the debt early on, however it, unfortunately, isn’t always that simple.
Sometimes, no matter how well you have planned your business, there is still the chance of running into financial difficulty – especially when it’s in its infancy.
It can take time for businesses to grow and develop which often leaves people no choice but to turn to other forms of debt to help them get by. As a business owner, you can often suffer cash flow problems, through no fault of your own, that result in your finances being stretched and make your debts difficult to pay back.
If you struggle to manage your business debt and become insolvent, it’s illegal to continue trading and your business may end up in bankruptcy.
Common causes of business debt
There are many reasons why people will fall into financial distress with their business, especially when the companies you are in debt to will continuously demand payments from you regardless of your cash flow issues.
If you run your own business, you expect to be paid promptly for any work or service you provide. Unpaid invoices can have a massive impact on your business cash flow and cause major delays in your debt repayments because you simply don’t have the funds to cover them.
Business debt can also occur if you experience cancellations of orders or bookings as this will reduce the amount of revenue you have coming in. This will not only make it difficult for you to deal with your debts but can affect your business as a whole due to needing funds to keep it functioning.
Life is unpredictable, so there are bound to be emergencies that will present you with unexpected business costs. These often put a spanner in the works when it comes to your cash flow and can leave your finances feeling stretched and your stress levels high.
Much like life, the market is also unpredictable and everchanging. Changes to the market condition can result in business being tough and your revenue being lower, leaving you struggling to make ends meet unless it picks up.
How to stay on top of business debt
Having your business falling into debt runs a high risk of being declared bankrupt, even if your business has the potential to trade successfully. You may be able to reduce the chances of this happening by taking some of the following steps:
- Speak to the people you owe money to
Ask them about spreading out your repayments or ways to work around your cash flow issues in order to help you until you can get back on your feet. If you keep them up to date with your situation they will be more willing to work with you.
- Sell non-essential company assets
Selling assets that you don’t necessarily need can be a great way to drum up some much-needed funds. It can also be a great way to save you money if you are able to sell something that is generally expensive to run.
- Reduce your overheads
Simple things like downsizing or relocating your office can be a great way to save you money to help ensure that you always have funds available to cover your debt repayments.
- Cancel non-essential business subscriptions
When you’re struggling with business debts, it’s important to look at the finances as a whole. Cancelling non-essential subscriptions such as memberships of trade bodies can save you money each month and open up more funds to repay your debts.
Our advisors can work with you to find the best possible debt solutions for you and your business. Together we can find a way to ease your debt worries making sure you make the correct choice for you and your business that will allow you to continue trading.
Call us now for immediate and confidential free debt help and advice.
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