Having a financially healthy business is always a major goal for most business owners. Profits that the business has for the fiscal year, allows it to invest in people and business needs without having to resort to borrowing money from the banks.
Planning and organization seem to be extremely important for any business, but for having a healthy balance sheet, those skills are too important to ignore. If you don’t have a clear number of the business debt you have, you cannot take the necessary steps to be debt free, or to establish a plan to be debt free.
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5 Steps to Getting Your Small Business Debt Free
Debt is a necessary part of running a small business. A business loan, line of credit or a business credit card can help your company hire new employees, purchase equipment and finance growth. But too much debt can stifle cash flow and put your business at risk. And the less you owe, the more you have to reinvest.
The average U.S. small-business owner has $195,000 of debt, according to a 2016 study by Experian.
Small Business Debt Management Tips
Here are five steps to digging your business out of debt.
1. Take Inventory of Your Debt
Sort all of your debts by interest rate and monthly payment. This includes payments on business loans, lines of credit and business credit cards as well as outstanding payments due to vendors.
This process can help you prioritize which debts to tackle first. Some experts recommend starting with the highest-interest-rate debt.
The Republican leadership’s plan now headed to the Senate repealing the Affordable Care Act (ACA) and replacing it with a poor substitute would prove particularly harmful for my business and for the more than 4 million small-business owners, employees and self-employed entrepreneurs who have gained access to affordable coverage under the landmark health care law.
Instead of looking out for small-business owners who are critical components to the strength of local economies, this plan pushes back the tax credit and hurts us all. Lawmakers who supported this so-called reform are trying to bring us back to a time when we paid more for less coverage and could not afford to cover our employees.
Adjustments made through the ACA helped even out the market and cut costs with tax credits for small businesses. Those have not been protected with this new plan. Also, when cuts to housing, food benefits and especially Medicaid are a threat, it weakens our ability for economic growth.
Small business owners: Tax Reform can’t wait
National Federation of Independent Business (NFIB) tells House Ways and Means Chairman the time is now for comprehensive tax reform
by Jack Mozloom
The National Federation of Independent Business (NFIB) told House Ways and Means Committee Chairman Kevin Brady (R-TX) today that small business owners expect comprehensive tax reform this year and that it must feature parity for businesses of every size.
“Tax reform has the potential to have an enormously positive impact on small businesses; it is their top priority in 2017,” said NFIB President and CEO Juanita Duggan in a letter to chairman Brady this morning. “Given that small businesses account for nearly half of the gross domestic product (GDP) and private sector workforce, and create two out of every three net new jobs, the U.S. economy will not reach its full potential for growth without a robust and flourishing small business sector.”
