Paying Down Debt – Small Business Edition

A lot of small business’s have debt. I have heard many reasons…construction, inventory, startup, expansion and more. No matter how or why you acquired it, here are some simple strategies for paying down debt.

 

Budget Above Minimum Payments

The minimum payment is often the easiest to make. However, whenever possible, you should try to pay more than the minimum each month. Even an extra 5% can save you tons on interest in the long term and even shorten the life of your loan. Paying down debt is not easy, but it is simple!

 

Prioritize Paying Down Your Debt Above Other Goals

Someone once asked me, “what would you do if you didn’t have any debt?” Debt can literally weigh you down and has stopped me from pursuing some of my dreams along the way. It doesn’t always feel fun or exciting to use our extra cash toward debt, but it can make a big difference. Hold off on other projects or goals that take an investment until you have your debt wiped out!

 

Think Outside The Box For Paying Down Debt

Here are some ideas for generating cash to pay down your debt more quickly:

 

1. If you sell products, offer a sale that encourages your customers to buy in bulk.
2. If you sell services, start a subscription program so you are guaranteed the income each month and you can boost the amount of services a customer gets in a year.
3. Bundle services or products together and offer a discount to your clients while you focus on selling more units.
4. Start a referral program to gain new clients and make more sales each month.

 

 

In Closing

Paying down debt quickly comes down to discipline. Consistently applying all of the above concepts will help you pay off your debt more quickly. Always remember how good you will feel when the debt is paid off early. How far will you be able to go with no debt payments?