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We have more debt management tips for you
In this article, we gave you four tips to manage your company's debt. We're now going to give you four more tips so you can deal with debt effectively.
Four additional tips for managing your company's debt
#1: Pay off expensive debt first
First focus all extra payments on the debt that charges the highest interest rates, while still ensuring that you make the minimum repayments on any other credit arrangements, says Francois Olivier, the Executive Chairman at Prosperian.
Once that has been paid off, Olivier recommends you move to the next most expensive debt, and systematically reduce your exposure to the debt with the highest interest rates.
#2: Track your spending
The only way to identify areas where you can cut back on expenses is to have a clear idea where all your money is being spent. This means keeping an honest record of exact expenses and spending habits instead of estimates.
'You could be amazed at how much money is unaccounted for every month, which could be allocated towards paying down your debts,' says Olivier.
#3: Don't use credit to finance your debt
Olivier says it's easy to become trapped in a downward spiral if one keeps using credit to repay debts.
He advises you to be proactive if the repayments are starting to overwhelm the monthly budget by contacting the lender and ask to have your debt restructured.
'Most reputable institutions would rather decrease the repayments in line with the client's budget rather than have the client default on the debt.'
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#4: Seek advice about borrowing money to pay off debts
Ideal Corporate Solutions says while it might be tempting to take out another loan or even re-mortgage your home in order to pay off your company's debt, avoid doing anything like this unless you have considered it extremely carefully.
'If you're thinking about borrowing money to pay off corporate debt, get advice first, as this kind of borrowing can escalate problems in the long-term.'
The site adds 'knowing that you're far from alone if your business is being negatively affected by debt may offer some minor comfort but if your company is beleaguered with debt and heading towards insolvency, don't delay in seeking advice.' These tips will also go a long way in helping you to manage your company's' debt.