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Business Debt Management: What to Do When You’re Drowning in Debt 

Business Debt Management: What to Do When You’re Drowning in Debt

There are tens of millions of small businesses in America. One common trait that most of them share is that they carry some level of debt. On average, it hovers around $195,000.

Assuming that your business brings in a regular revenue stream and you prioritize paying your debts on time, it’s not a problem. What happens if you take on debt and things go sideways, such as a pandemic?

When things do poorly, you can find yourself drowning in debt. If this sounds like you, keep reading. We’ll cover some business debt management essentials to help you navigate the situation.

Know Your Debt

Even if you know the importance of debt management, a lot of people start to put their heads in the sand when debt spirals out of control. As things progress, you can easily lose track of what you owe to who.

Before you can engage in any serious small business debt management, you must understand the scope of your debts. Sit down and get all of your debt information gathered together in one place. Once you have a clear picture, you’re in a position to make a plan.

Cut Expenses

Very few businesses run such a tight ship that they can’t find some ways to cut their expenses. When debt runs out of control, though, every dollar matters. That makes cutting expenses a key answer to the question of how to manage debt in business.

Are you overspending on marketing tactics that don’t work? Did you buy underused equipment that you can sell off? Can you negotiate better prices with your vendors for crucial supplies?

These are all ways to help cut expenses. 

Revamp Your Budget

If you don’t already use a business budget, this is the time for you to make one. If you do have a budget, it was likely made before things went poorly.

Review the budget and look at how it compares with your current realities. Does it work from false assumptions, like how much revenue you generate? If so, plug in the current numbers and see how things look.

If you use an accountant, this is a justifiable reason to spend a little bit and get a professional eye to look over the problem.


It’s an almost universal truth that lenders and creditors would much rather get money from you, even in small increments, than go to court. Contact your creditors and lenders and see if you can work out a repayment plan you can afford.

You can also turn to debt management businesses, such as, to help you resolve your business debts.

Business Debt Management and You

When business debt gets out of hand, don’t turn a blind eye to it. It can feel overwhelming, but careful business debt management can help you fix the problem.

Start by evaluating your total debt. Then, you can revamp your budget, cut expenses, and negotiate with vendors on supply prices. Just as importantly, you can negotiate with your creditors and work out a feasible payment plan.

Looking for more business finance tips? Check out the posts over in our Biz section.

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