Debt Management Strategies To Help Your Business Stay Afloat

Many licensed moneylenders in Singapore have increasingly tightened their terms for borrowing, with small businesses struggling to balance between paying off their debt and successfully running their business. Even though filing for company bankruptcy comes with many adverse effects, it may be one of the only ways for business owners to salvage their business properly.

To avoid taking down your company due to debt, here are a few various measures you can take to stabilise your business.

Revisit Your Budget

When the debt of your business is on an upward trajectory, you should take the time to take another look at your budget. Your budget should be made in a way that suits your current situation. Firstly, you should ensure that your business revenue can comfortably cover your monthly fixed cost. If you have a credit card, you can pay off more than the minimum amount to avoid building up a debt that will take years to complete.

Another way you can reduce debt is by striking out all and any non-essential things or items from your budget.

Cut Out Unnecessary Costs

After revisiting your budget, you will start to identify things that contribute the most in increasing the debt of your business. Some of the most common ways of cutting costs are selling off unused equipment or scrap, cutting down on the cost of phone systems, and limiting the number of employees. It would also help to consider avoiding non-moving goods in your business.

Prioritise Debt Payments

If you are currently dealing with several debts, you should prioritise those with the highest interest. For instance, if you have a monthly instalment loan that is personally guaranteed, you should look to pay them off first. Otherwise, you could risk losing your property, which can prove to be a huge setback.

For any profit you receive, your priority should be to pay off all your debts.

Inform Your Creditors

You should always seek to let your creditors know of your current financial situation and the hardships that you are going through. If they have a hardship repayment plan with terms that best suit your current situation, then you should consider going for it. If they do not have one, you can request to change your terms of payment or reduce your interest rates.

As a business owner, you should ensure that you follow the agreed payment plan so that you can gain the full trust of your creditors.

Seek Counsel

Some creditors may find it difficult to recognise your financial situation, and if that is the case, you should seek alternatives. One way is to seek help from a credit counselling organisation. While such organisations work mostly with consumers, some are also willing to work with small business owners. They offer credit-seeking counselling and, in some cases, recommend bankruptcy attorney advice.

Consolidate Your Loans

One of the best ways you can cut down on your monthly cost without interfering with your credit is to consolidate all of your remaining loans, debts and payments. By obtaining a consolidation loan, you can ensure that your repayment costs are much lower than before, and help you successfully sustain your business.


Debt management is integral to ensuring that your business cash flow is steady at all times. As a business owner, you should aim to increase your revenue while reducing your expenses. You can always consider outsourcing or hiring a certified accountant to help you figure out the root cause of your financial problems.

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