Ask any small business owner or entrepreneur to name their foremost hardest challenges that don`t let them sleep in the night, they will say debts. Find out 5 ways in which you can not only repay your business loan but can also boost it.

2. 5 Smart Ways To Eliminate Debt & Grow Your Small Business
If you ask any small business owner or entrepreneur to name their foremost hardest
challenges that don`t let them sleep in the night, they will say without a second thought-
money!
Paying off debts, growing business, increasing profitability, and achieving financial freedom
are a few challenges that SMEs and MSMEs often face. This was true before the pandemic,
but after it, it has become even more crucial for entrepreneurs to overcome money
challenges.
According to a survey published in Forbes, “95% of businesses surveyed said the pandemic
had affected their bottom line, and 53% estimated that 2020 revenue would drop by more
than a quarter.”
Even the best business coaches often come across questions like ‘how to get my business
out of debt’ or ‘how can I repay my loan as soon as possible’ by small business owners.

3. Most entrepreneurs begin their start-up by arranging funds through debt funding, equity
funding, loans, or through other less formal sources like friends & family. But the experience
of being in debt can be scary as well as overwhelming.
If managed smartly, borrowing funds can help you accomplish your goals. On the other hand,
mismanaged business debts can not only affect your financial wellbeing but can also cause
mental stress, especially to small business owners that are worse affected due to the Covid-
19 pandemic.
There are many government schemes to help small business owners with loans. The Indian
government had offered relief to MSMEs in the form of subordinated debts, collateral-free
loans, and equity infusion through its Fund of Funds (FoF) scheme in 2020. This scheme
proposes to purchase up to 15% growth capital in high-credit MSMEs.
If you have a well-thought financial plan, you can solve the cumbersome process of taking
your business out of debt, just like others. Here is how you can chart your way out of debt:

4. 1. Manage Your Debts
The first step that will take you closer to managing your debt is to organize all the details of
exactly what you owe. Make a list of your debts with EMIs, interest rates, and tenures. This
will help you recognize the costliest debts.
2. Settle Costliest Debts First
After sorting out your debts, pick the costliest one! Costly debts, if not paid on time, will
extract the highest interest. This can drain your finances. Hence, settle your costliest debts
on a priority basis.
3. Plan Monthly Budget
One of the most vital debt management techniques is to plan your monthly budget. Make a
list of your income & expenses while deciding your monthly budget. This will give you a
clear picture to think about ways to reduce your daily expenditure. Having details of
monthly cash inflow and outflow can help you save money that you can use to clear your
debt.

5. 4. Consolidate Loans
Sometimes keeping a track of all the loans can be difficult. If you have too many loans,
consolidating them into one can be a good idea. This will leave you with just one EMI.
Business loans, personal loans, and credit cards provide you with this option. It will remove
various debts and leave you with just one loan to track.
5. Insure Against Economic Shocks
The future is uncertain and it is wise to protect yourself from uncertainties that you might
be exposed to. E.g. a loss of a job could lead to delayed EMIs. So, to avoid such situations,
create an emergency fund to help you sustain yourself during a bad phase. Ideally, this fund
should be 3-6 times more than your current monthly income.
Repaying loans is a moral, legal, and also financial obligation. With smart and effective debt
management strategies, you too can get your business out of debt.

6. Learn how to manage your debt with the top-industry leaders from our Problem Solving
Courses.
Source: https://news.badabusiness.com/finance/5-smart-ways-to-eliminate-debt-grow-
your-small-business-10111.html
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