Ah, to be an entrepreneur. It’s living the dream really. Making a stack of money while producing a product or service that makes people’s lives better and easier. But it’s not all fast cars and private jets, especially if you slip into debt. Debt can break a potentially stellar business if you can’t control it. Let’s examine six different ways you can protect your startup from the debt monster.
Clean Up Existing Debt
Do you already have creditors knocking down your door?
It can get exhausting fielding all those emails, phone calls and text reminders while simultaneously juggling multiple repayments, all at various interest rates.
Did you know that if you consolidate your debts with a loan from Latitude Finance, you could actually save a good deal of money? That way, you get one single loan amount to pay off your various debts, and then pay attention to one repayment, at one interest rate. You’ll save so much money, and the stress you’ll avoid is a priceless gift.
Be Careful When Buying Second Hand
Let’s say you have your eye on some expensive second-hand equipment or vehicles. While you may think that you’re saving money by buying used, did you know that sometimes you can be buying debt as well? Lucky there's nation-wide register that you can check to see if there’s debt owing on a potential purchase.
Also, if you buy second-hand goods you may find yourself shelling out cash to repair, or even replace them, a few short years after you have bought them. Sometimes it does make sense to buy new and get peace of mind, and a good warranty.
Get the Best Loans You Can
Let’s admit it – sometimes the need for finance is unavoidable. It’s that old adage after all, “you’ve got to spend money to make money”. And, to spend money, you need money. With that said, when you decide to put yourself in the market for a loan, you want to ensure that you’re getting the best possible deal that you can.
It’s well worth spending a fair bit of time researching lenders and looking for good rates. Some loans even have bonuses like cash backs or no fee credit cards. You could even consider a business loan broker to help you get the best deal.
Tight Management of Finances
One way to avoid getting your business into the deep pits of debt despair is to keep a very, very tight control on your outgoings. Ideally, you want to be the one in control of any spending. If that’s not possible, and you can afford it, delegate a trusted member of staff to keep close control of your financials. Make it their sole job to keep you in the black and out of the red.
Invest in Your Relationships
This may seem a no-brainer, but you’d be surprised at how many people fail to do this. You need to invest in each and every relationship you have – both your customers and your creditors.
Imagine that you’re late paying an invoice and you know you’re going to be late. If you have a good relationship with the creditor you could reach out and ask nicely for an extension. Chances are they’ll give you the nod.
Set and Stick to Credit Limits
Finally, pick and stick to a firm credit limit for all your borrowing. It helps to know how much you can reasonably afford to borrow.
Your Way to Debt-Free Success
There you are. Set and stick true to a credit limit, and continue to invest in all your business relationships. Considering investigating a debt consolidation loan, and take care when buying second-hand equipment. Do your research and get the best loan you can and keep a firm, controlling hand on your finances. Voila!