Unlock Cash and Reduce Interest: A Smarter Debt Strategy

Regularly reviewing your business debts can lead to reduced interest charges and improved cash flow. Taking the time to assess your current debt structure allows you to identify opportunities for consolidation, better terms, or smarter repayment strategies.

Start with a Debt Audit

List all your business-related debts, excluding supplier payments. Include:

  • Debt Amount: How much do you owe?
  • Interest Rate: What rate is being charged?
  • Fixed or Floating: Is the interest fixed or variable?
  • Repayment Terms: How many years are left to repay the debt?

By organizing this information, you can spot opportunities for debt consolidation or refinancing. Moving debts to one lender or extending repayment terms can free up cash for growth or day-to-day operations.

Evaluate Personal Drawings from the Business

Are your personal drawings putting strain on the business’s cash flow? If so, it may be time to reassess:

  • Profitability Strategies: Does your business need to increase profitability to support your current drawings?
  • Capital Injection: Is external capital required to fund growth and ease cash pressures?
  • Adjusting Drawings: If drawings are too high for the business to sustain, reducing them temporarily might be necessary.

The Personal Budget Exercise

A great starting point is to create a detailed personal budget, listing all your expenses—rent, groceries, childcare, and discretionary spending. This exercise often reveals unexpected spending patterns.

If you’re serious about getting clarity on your finances, we have a Personal Budget Template to help you categorize and track expenses. Don’t be surprised if the numbers are eye-opening!

Optimize Your Debt and Capital Structure

Getting your debt and capital structure right can transform your cash flow. The key steps include:

  • Creating a Personal Budget: Know exactly where your money goes.
  • Cashflow Forecast: Project the business’s cash flow and identify potential improvements.

We Can Help You Take Control

Forecasting may sound intimidating, but it’s one of the most valuable tools for business success. We’ll guide you through the process and create a practical cash flow plan.

At our Cashflow & Profit Improvement Meeting, we’ll help you assess your debt structure, create forecasts, and calculate how much extra cash you can unlock by making simple but impactful changes. You’ll sleep better knowing your finances are under control!

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