Xero: 7 ways to manage SMB debt in 2015

Debt can be a useful tool to start and grow your business, but small business owners need to make sure their debt is working for, not against them.

Renegotiate bank loan terms:

"You can renegotiate your bank loan depending on your situation," Crone says.

"If you need more cash in the short term, you can ask for a higher interest rate in order to reduce your monthly payments – even though the overall repayment amount will be larger."

Work out a payment plan with your creditors:

"If you are having trouble paying off your creditors, talk to them before they come asking for their money. If you put together a clear payment plan, they will be more receptive," Crone says.

"After all, it’s in their interests for your business to succeed; if you go under, they get nothing."

Ask your biggest suppliers for a discount:

"Don’t be shy," Crone says. "The people you buy from in bulk and / or have a long history with are great candidates for getting discounts.

"These discounts can add up, and the savings can go into paying your debts."

Cut short term costs:

"Accounting software gives you visibility of your largest outgoings, so you can see which costs to cut," Crone adds.

"For example, you could reduce the amount of office space you lease. Be sure to think carefully about where you cut costs – sometimes it can be counter-productive.

"If you lose your biggest customer because you cut your ability to serve him or her for example, you’ll be worse off than you were in the first place.

Look for opportunities for more revenue:

"Easier said than done – but it’s not impossible," Crone adds.

"One way to get a short-term boost is to offer clients a prompt payment bonus. You’ll lose a bit of revenue, but you’ll have the cash you need to service your debt faster."

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