Debt is not something that should be taken lightly, especially when a small business is in question. It can very well be the thing that makes or breaks your business. Sometimes, though, debt is inevitable. Instead of letting the situation get out of control and losing more than you already may have, it’s best to manage that debt. This can be tough for inexperienced owners, but can also give headaches to those with more practice. That’s why there are several great tips for debt management that are bound to keep your finances in check.

1. Keep track of how much you owe and to whom

Debt can be hard to keep track of, especially if you owe to more than one person. It’s smart to keep a log of your debt. Write down exactly how much you own and to whom. That will help you deal with it, and won’t allow room for mistakes.

You can also prioritize your debt in that way. Figure out which debt you need to pay off first and why. The log can contain specifics about the nature of the debt and the one who you borrowed the money from so that it’s easier to prioritize.
What’s more, consider writing down information about the monthly bills you need to pay. Paying the bills on time every month will take one stress away, and leave room to just focus on paying off the debt.

2. Have an emergency fund

When you start your business, it’s a good idea to leave money on the side in a separate fund. Your business can be flourishing in the beginning, but it might not always be that way. Having an emergency fund gives you something to fall back on in case things don’t go so smoothly.

They’re extremely handy in case of debt. You might not have enough to pay off the whole debt with your emergency fund, but you’ll still have something. That’s better than staying stuck in one place and not being able to repay anything at all.
An emergency fund also gives a sense of security as you know there is a sure solution to your possible financial troubles.

3. Set a monthly budget and stick to it

Keeping a budget is a very smart tactic. You know how much money you get monthly, and you should, therefore, figure out how much you should spend each month. The tricky part about debt is that other business expenses still have to be paid, so you can’t put all your income into paying the debt off.

A budget will help cut down those expenses and leave more money for solving the main problem. It will also let you in on the exact amount you need for certain things, and can therefore even be useful in figuring out what may have caused the debt. Knowing the cause will help you avoid it in the future, once this issue is solved.

4. Be informed about your credit score

A credit card score is crucial for getting better rates and improving your credit rating among other things. That’s a 3-digit number that basically decides your future. Many people don’t even know it exists, let alone what it implies.

That’s why you should be informed about everything that has to do with it and your credit card in general. Go to your bank and describe your concerns. Before you do, though, it’s always a good idea to inform yourself online. That way you’ll know what to ask your bank when you go there.
You have every right to stay informed about your credit card score, so don’t feel embarrassed about going and asking. If it’s a decent bank, it will be happy to help.

And in that same vein, know that there are many banks and companies that will help you out even if you have a poor credit rating. Many financial institutions provide bad credit loans to people, you just need to be persistent.

5. Don’t sign up for just anything

Rates can be the trickiest part when it comes to banks, and one of the main causes of debt. You can get a credit card for just about anything, very easily. They’re widely available and very enticing, as they seemingly offer a lot of benefits.

If you have a good credit score, that means you’ll be able to get good rates. Even if you don’t though, the bank will make sure to find something appealing. It doesn’t mean you should get a credit card just because the terms seem nice, though.
It’s important to be thoroughly informed about what you’re signing up for. Not being informed and taking just anybody’s word for what’s best for you can be a serious cause of debt. Remember that no one can decide for you and that’s why you need to be as informed as you can.

6. Recognize you might need professional help

Sometimes, it’s okay to admit defeat. We can’t always solve problems on our own, and that’s especially true when it comes to something as serious as the debt of your small business. That’s why it’s advised to look for professional help.

You may have tried multiple strategies on your own, and none of them seem to be working. It doesn’t have to mean that you did anything wrong; it just confirms that solutions are specific to the situations. A professional will recognize that. They’re going to look into the issue thoroughly and let you know what the best way to fix your debt is.
Recognizing you need help and setting aside your ego might be the best thing you can do your business if you want it to succeed.


The biggest mistake people make when it comes to debt is dwelling on the cause too much. Yes, it’s important to know why it occurred, but you shouldn’t beat yourself up about it. The focus should be on solving the issue. Once it is, it will be easy for your business to flourish and grow steadily. In situations like these though, it’s best to follow already fail-proof advice. That way you’ll be sure you’ve done everything you can.
All in all, we’re confident you’re informed enough to face any obstacle that your business faces.