Ways To Manage Debts In Your Small BusinessKuza Blog

Shaun H. Ruff


Do you run a small business that is constantly in debt? 

You are not alone, even the most skilful entrepreneurs, due to natural disasters and pandemics, have found themselves in a similar situation to a point of thinking to avoid all forms of debt altogether. 

However, debt itself is not a bad thing and it is necessary when you run a small business but how it is managed can eventually categorize it as either a bad or good debt.

Therefore, as an entrepreneur, you need to gain some skills on how to manage your debts and save your small venture from collapse due to bad debts.

In case you are experiencing a build-up of debts in your small business which can stifle your cash flow, it is time to think of a management plan and below are a few strategies you can apply either to control your debts or to get rid of them:

First remember that your situation is unique and therefore, not all debt management approaches will work for you.


If there is a sure way you can find some cash to settle your business debts is by reducing your expenditure and here, any unnecessary costs must go.

This can be done by, first, splitting costs with other businesses by sharing on transport, operation or office space, share resources like internet.

Second, you can consider downsizing by cutting the number of employees, or moving to a smaller office or operation base or to a residential area if possible (home office).

Third, cut on business supplies and sell any other equipment that you are not using instead of leaving them to gather dust.

Boost sales

This is another best way of managing debts in your business and here, you can consider a few things such as increasing prices of your goods or services which may sound weird as you may lose some of your customers to a competitor.

However, if you spice it with offers and discounts, especially for bulk buyers, your business can still remain competitive.

You can also engage your customers on social media when they make product inquiries or ask any questions related to services rendered.

Remember, when customers give good online views about your products or services can boost the trust that may translate to sales.

Then you can try rewarding your loyal customers which can increase customer satisfaction and can propel them to recommend your products or services to their family members and friends. 

Refinance all your high-cost debts

Here, you need to pay attention to any rise in interest rates of your loans as this will have an impact on your finances.

For instance, if you have a loan with M-Shawari whose interest rates were reviewed in the recent past, you have to check and compare with other loaning partners as this will help you know where to look for your loans next.

Rate hikes happen any time, hence you will need to consider refinancing any form of high-cost debt.

In this, business credit card debt can either be consolidated or refinanced by doing a balance transfer to a new credit card.

Access and rework your budget

It is time to back to the drawing board and check on your budget plan whether you adhere to it or not.

Or, there could be something wrong with your budgeting that needs to be corrected. Here you are free to consult with experts to avoid making the same mistakes again.

Shorten client or customer payment terms

There are those customers who order goods or services to pay at a later date based on a specific agreement which can be after a month, two or three.

You can reduce the duration of payment by explaining to them why and even try to offer discounts for early payments.

Know how to deal with creditors

Generally, learn how to deal with creditors and lenders knowing that they are not against your business. So, be open and honest about your current situation and you can also apply for loan consolidation.

Make a debt inventory

It is good to list your debts and who you owe and what you owe them and you need to be thorough and sincere.

Make sure you include all the interest they charge you and what you have paid so far and what might have accrued over time.

Write down every bit of line of credit you have ever tapped into including your credit card debt.

You can do all these, on a spreadsheet aligning each debt by rates charged and monthly payments then you can move to prioritize which debt you should pay first.



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