Many small business owners need to take a loan for starting and running their business. Sometimes this debt can become a burden and the company must try to pay it off as fast as possible. Here are some ways you can pay down your small business debt.
You should pay off your smaller debts first and then move on to the bigger ones. After you have paid off the smallest balance, you should pay off the next lowest amount due, at the same item, add the previous debts’ minimum amount to the new debt. So, at the end, you will have more money to pay of debt in your largest account.
You can bring together your various loans with different interest rates to a single low-interest loan. The debt consolidation company will decide on the new loan rate. They are the ones who will be collecting the payment. This way you only need to pay one bill every month.
You should cut down your business costs. You can sell off unneeded assets, equipment, etc. You can reduce the size of your workforce and try to increase sales by various new marketing activities.
It is the opposite of snowballing. You should first pay off debts with highest interest rates before you move onto the debts with lower interest rate. But you need to continue to make the minimum payment on all the accounts.
Chapter 13 Bankruptcy
It is the last resort; however, you can pay off debt without giving up control of your property. You can develop repayment schedule to creditors. You will need to pay a part of your future income for three to five years.
These are most effective ways of paying off your company debt. It won’t affect your credit score and you won’t need to give up your company.