It can happen to anyone; debts are like these ghosts that lurk over your balance sheets and just wait to find a loop where they can settle and ruin your life. But don’t give up and bury your face in your hands – that won’t solve anything and it can easily happen to you again if you don’t do the right thing: be smart and find the root of the problem. For a lot of people, that’s the result of simple negligence, which really can’t be justified, but it happens: a nasty divorce, suffering a major financial setback, huge expenses and other bad events. While these are matters of personal interest where the solution depends on various factors, there are only a few debt solutions you can do on your own to get out of a company debt that’s been piling on for quite some time.
Get professional help
If you’re not exactly a finance expert, handling your business debt situation will be hard for you because you’ll instantly opt for the solution that’s easiest but most expensive: getting another loan. From all possible solutions you can think of, this is probably among the worst ones because it will only drag you into more debt. Get professional help instead; there are organizations that are specialized in managing such situations, finding the right debt solutions, and will be able to tailor a solution according to your needs.
Start calling your creditors
Once you realize the debt has started to eat your business, the first thing you should do is go over the financial sheets and see how much damage has been done to your bank accounts and the treasury. When you realize you won’t be able to go through the situation, start calling the creditors – banks, loan houses or whoever was financing you. These institutions need to get a repayment of the loan they gave you which means they’ll probably offer you the opportunity to take advantage of their internal hardship programs which include lowering your payment, expanding the repayment period or giving you some kind of a free period. Another thing you can do to reduce your monthly costs for repaying your debt, is consolidate your business loans into one payment. This way you’ll deal with only one creditor and with the consolidation you can get a better deal: paying your debt with a lower interest rate.
There’s this theory developed by a finance expert called Dave Ramsey who thinks that getting out of a debt situation is 80% mental and 20% financial knowledge. With this being said, Ramsey suggests you start with paying your smaller loans first so they create a positive and motivating effect on your paying velocity. Another theory suggests that it’s a lot better to start paying your bigger loans first so you have less to pay off later, but in the end the savings and the difference is really negligible.
When you look at all your options and the level of damage that’s been done to your business, the easiest and best way to deal with the situation is to hire professional help. After all, handling finances for the sake of the business is a vast area that requires the knowledge and skill set a financial advisor has.