Debt relief may be in sight for small business owners in 2021.
Amidst the COVID-19 pandemic, small businesses across central and southern California have had to face the troubling reality of shuttering their businesses for a period of time if they were not deemed essential or substantially cutting back on hours and capacities. This has impacted small business owners everywhere, with some having to close their doors for good while others have accumulated more debt to try to remain in business.
Nowadays, however, there’s more reason to have hope that your small business can endure these challenging times. A variety of new resources exist for small business owners, including the availability of more state and federal assistance. While it’s wonderful to have so many options, it can be confusing to figure out which is the best choice is for you and your business.
If you are wondering how to get your small business out of debt, here are the top 5 strategies to consider in 2021:
Tip #1 – Analyze from Within to Cut Costs
Downtime and “lull” periods can be frustrating, but they’re also opportune times to look within your business to evaluate cost-saving measures.
Here are some factors for you to consider:
- Business debt restructuring
- Business debt settlement
- Business bankruptcy alternatives
- Negotiating with creditors
- Analyzing health insurance benefit options
- Addressing regulatory burdens
- Understanding customer spending better
- Reviewing interest rates
- Considering mobile workspaces
- Consolidating multiple loans
By using this unforeseen downtime to analyze your business internally and find ways to reduce costs, you can turn this slow down into something positive to help your business grow.
Tip # 2 – Analyze Redundancies
As small businesses feel the ongoing pressure of retail storefront closures, minimized hours of operation, and other factors that negatively affect the bottom line, taking a good look at redundancies in a cost-savings context may end up being very helpful.
Redundancies may exist on several levels – both physical and human. Ancillary offices, storage facilities, leases, and other brick-and-mortar settings may be worth looking at closely in terms of cost efficiency: Are you utilizing all of your physical workspaces, or can some be let go to save on overhead? You can also look at the current workflows in place and strategize new ways to streamline them to become more efficient – and therefore, more profitable.
As a last resort, reducing staff may need to be considered. While layoffs can affect company productivity and interfere with workplace dynamics, it may be prudent to discuss the idea if all other options are unavailable. You certainly wouldn’t be alone in having to head in this direction. There has been a 1,021% increase in layoffs for small businesses in March compared to February, according to a study by payroll provider Gusto.
Tip #3 – Stay Updated for Relief Funding
New or expanded small business grant and loan opportunities may arise in the future in light of COVID-19 and the resulting recession. Keeping track of how the decisions of policymakers affect lenders and service providers will help you stay on top of the news that could potentially affect your small business. Chambers of commerce and local business associations are a great way to have the information distilled for you or passed along by colleagues.
According to Gusto’s Tomer London in a CNBC report, “There is a lot of stimulus out there already. The key is to get those dollars in the hands of small businesses.”
Examples of state and federal government assistance programs that may be new or modified in light of COVID-19 include the California Small Business COVID-19 Relief Grant Program and Paycheck Protection Program through the CARES Act, as well as those provided through the U.S. Small Business Administration.
Tip #4 – Reach Out to a Small Business Debt Expert
Small businesses play a critical role in the economic vitality of the communities we live in. In fact, small employer firms with 1 to 499 employees account for 47.5% of the private sector workforce, according to a study conducted by the Small Business Credit Survey, an annual survey of firms with fewer than 500 employees. Speaking with a debt relief specialist can help maximize your chances of securing state and federal stimulus funds available to you, as well as navigate the complexities of available options to eliminate debt.
Seek Financial Assistance
If you need expert advice on how to get your small business out of debt, PCS Debt Relief offers debt relief services tailored to clients’ needs. We understand the burdens and stress debt creates and the complexities every small business faces. We’re here to help you every step of the way. Call (636) 209-4481 for a free consultation to achieve financial stability.