This article has been written by Daniel Ng. Daniel is a freelance writer who has been writing for various blogs. He has previously covered an extensive range of topics in her posts, including business debt consolidation, Finance, E-commerce, and start-ups.

Even before you get into a business, you will have to consider one thing strictly, and that is business debt management. How you would go into debt while constructing the business from step zero, and how you would manage things, and get out of the debt eventually, while growing the business as planned, is a matter of deep consideration and planning.

How to Manage Your Business Debts with Prior Planning

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When you plan these things right, then you plan to succeed. That’s because money is the matter which is mainly behind the success or the downfall of a business of any scale. There are definitely more matters, which are as crucial but money matters are prime, and businesses that have the concrete planning to manage debt from scratch, can always succeed and cross the bigger hurdles with the power of enough savings and revenue generation.

Businesses Find It Difficult to Manage Debt

Normally businesses find it difficult to manage their debt unless planned well. Initially, any business would take the help of loans to get started and gradually construct the foundation pillars.

The lion’s share of business capital is arranged through loans which makes the business indebted from the beginning. And this is pretty common and normal. This is not actually a matter of concern or problem when you have your plans right to meet the expenses and also pay back the debt without getting pressurized. And this depends on the planning prior to starting the business.

Financial planning is everything here. When you fail with the plan, then you sink into the debt, and then the business suffers.

Everything Is In The Planning

If you have good financial plans made and verified by experts even before you start the business to apply for loans, then you take the right step.

The plan must include the following:

  • What would be the interest rate for the loan, and if you are getting the lowest possible interest for the loan.
  • Will you be generating enough revenue each month from the initial phase of the business to meet the vital expenses, business running costs, salaries, raw material buying and all, and still have enough money to pay back the loan on time each month?
  • How long would it take you to pay back the loan fully?
  • What if you plan to pay back the loan prematurely, and in that case how much pre-closure penalty you will have to bear?
  • Are you able to take the responsibility of paying back the loan through the tenure each month?
  • What are your backup plans? You should ideally have a plan B and C in case your main plan, the Plan A fails. In that case, also you must have an alternative way to pay back the loan and still, continue with the business.

If you by chance fail to manage the loan for any reason, then you must have some way to protect the business still and manage the finances. There are always great plans to manage debt which turns unmanageable. And various plans are also rated according to how useful they are in debt management solutions. You can check ratings to know in details about the plans.

One Debt Invites in Another

Debt, when managed on time and managed well is not a matter of concern. But when one debt gets unmanageable, and you fail to pay it back on time, and fail repeatedly, then often the first instinct is to get another debt to pay the first debt back and get out of the trouble. And this is a vicious cycle, which often leads businesses into multiple debts.

There are often more reasons and circumstances too, which leads a business eventually into a number of debts. And when the numbers of debts are more, then you have to track them with extreme care to pay them back on time.

The Problem with Multiple Debts

Multiple debts often bring in trouble. There are many problems you face when handling and managing multiple debts in a business. As you have your reputation associated with every debt account, hence you must try to stay clean and prove yourself a regular payer in front of the creditor.

To stay a good debtor in the records, you must ensure that you pay each EMI for each plan from the various sources on time. And this requires you to maintain a calendar too.

To manage things in a systematic way you need to maintain a debt payment calendar where every important payment date and the amount is recorded. And this can be a cumbersome job.

The rate of interest which varies with every loan and the creditor is also a point of concern. The various loans you took at different times through different sources would all be with differing rates of interest. And some rates would be quite high because you took a loan in a short notice out of some urgent requirement or compulsion.

Hence you need to bring in line all these loans and ensure you take some smart steps to lower the terms of interest. And all that is possible when you consolidate the debts.

What Is Debt Consolidation?

Debt consolidation is one of the most intelligent ways to streamline all existing debts which are bothering you for making you track them individually, and also by paying separately for them while going through a chaotic system altogether.

When you get a debt consolidation loan, which is one single loan to pay back all existing debts altogether, then you get sorted. It’s only one single loan replacing all existing loans, and that too at a much low and reasonable rate of interest. And the tenure can also be chosen to be a long one as per your choice so that you can get the EMIs divided into much easy to manage small amounts.


Choosing the right source for a business loan, planning adequately before taking loans, and having full proof planning to pay back all loans on time is the path to success in any business. And if you face any hitches on the way, you should always take expert advice on finances from authorized bodies.