Debt management is a powerful tool for keeping a business running. You must manage debt wisely if you are to keep it from taking over and choking your finances. What does that look like?
Review your debt constantly. How much of your balance sheet is made up of debt? What is your debt to asset ratio? What percentage of your revenue is being funneled into debt repayment? Keep an eye on things so that you always have an accurate picture of your debt situation in your head. Reviewing debt quarterly is a good idea. Biz2Credit offers a free tool called BizAnalyzer that provides a snapshot of your company’s cash flow, debt repayment, revenue, and other important financial data.
Evaluate and Reassess
If you do see an issue starting to escalate, you can catch it before it gets too big and take action. Can you refinance or combine some debt in an effort to lower monthly payments? Is something going to be paid off soon? Is there room for new debt so that you can start that project you have been considering?
Make a Plan
Each of these steps are part of a bigger picture. You need a debt plan for the future. Is it time for a new building? Maybe you are trying to get your debt to a point that commercial real estate loans are an option. Do you have a cash flow issue? Maybe you need to look into a business line of credit and loans to bridge some gaps while you work on a more permanent solution.
It is inevitable that part of managing your debt is going to mean you need, at some point, to take on more debt. Financing is part of the life cycle of a business. Whether you want to look into SBA loans, marketplace lending options, business expansion loans, or any other business financing options, Biz2Credit can help. We have an extensive network of lenders, and we can match you with those that offer just what you need. Visit Biz2Credit today for more information.