How well a small business can survive through the layers of loans that it has to take would largely depend on the credit management skills of business owners. Borrowing for business is a necessity to infuse working capital, and as a business owner, you must know how to live with it without feeling stressed.  However, many small businesses do not last long after startup due to inept management of the loans that they take. According to the US Small Business Association (SBA), the top reasons why small businesses fail are – using business funds for personal reasons, lack of resources and abysmal credit management. If any company is unable to cover the necessary expenses for payroll and rent, then it is for sure that it is heading towards closure.

The way to survive is to acquire the skills of paying down debts in a methodical manner so that it adds to the financial health of the business. From formulating a plan for payback to restructuring debts and cutting down on excessive costs, here are some things that you can do to keep your business financially buoyant.

Recast your business budget

To have a closer look at your financial situation, turn to the business budget that highlights variable expenses, fixed costs and sources of income. May be you are falling behind in monthly payment due to fluctuations in cash flow, and you can adjust that in the financial plan for easing out the situation. By referring to the budget, you will be able to decide the amount that you must keep aside to make payments to creditors and suppliers and pay rent. For assistance in business budgeting, you can attend free business counseling organized by some nonprofit associations.

Bring down expenses related to business

In the course of time, the spending pattern in business keeps changing and you get used to several expenses that are superficial that you can do away with. Identify the essential expenses to keep the business running and know about the expenses that you can live without. Review the space utilization in your office and see if you can lease out or sublet some unused space to recover money. Shifting the office premises for lower rental accommodation is another way to reduce expenses. Stopping some subscriptions temporarily also plugs the drainage of money.

Drive for more sales

Besides cutting costs and expenses, you must pay attention to increasing revenue by boosting sales. Think about offering discounts and freebies that would attract more customers. At the same time, offer discounts for quicker payments from debtors so that the cash flow remains steady.

Restructure your debts

Another effective way is to restructure your debts with the help of a professional and reliable debt structuring company. The company you engage will negotiate with creditors on your behalf to review and revise the credit agreements for a favorable term that helps to reduce the payments that you make for debts. It would generate some saving. For successful restructuring tell the restructuring company about your financial targets so that they work out a suitable package for you.