SmallBusiness.com cited an Experian study of small business owners in America. Experian found that the average debt held by business owners was $195,000. Getting a loan was more difficult for small business owners in the aftermath of the Great Recession. Nerdwallet reported that many startups and other small businesses got off the ground or stayed afloat with either personal or business credit card debt.

The Problem –

According to The Balance Small Business, using a personal credit card to fund your small business risks your personal credit score as well. Also, Forbes reported that, even when a small business owner is using a business credit card, they likely signed a clause in the contract that allows the credit card company to go after the debt personally. The clause is called a “personal liability clause.” Thus, even if you close your business, you will still be personally liable to the credit card issuer for the debt on the business credit card.

Forbes also reported that these small business credit cards, like the consumer cards, carry interest rates that are often over 15 percent. If one has racked up considerable debt on these cards, it gets really hard to pay them down because you are mostly servicing the interest. This can choke off your cash flow and potentially harm your ability to get credit from your suppliers if you begin to miss payments.

Keel Associates recommends businesses laboring under debt take some quick and decisive steps to get their businesses back on keel financially.

Carefully Look at Your Budget –

Hammer out a budget with income and expenses. There are a number of apps that make the budgeting process easier for small business owners. Will you be able to pay down the debt at your present income level?

Increase Income –

Besides your current clients, have you considered some of the new companies that have sprung up in the past several years that connect you with new clients? According to Lawn and Landscape, companies such as Lawn Love, Cuttly, Green Pal and Mowdo are fighting to be the Uber of landscaping. These companies may not allow you to earn as much per job, so this tactic may be for a temporary boost in income only.

USA Today suggests shortening payment terms with clients. For example, can you provide a small discount for customers who pay on site or the same day?

Decrease Expenses –

Are there expenses that you can temporarily terminate until the debt is paid off? Or, can you get gasoline cheaper by working with a commercial fuel supplier? Even though you would hate to do it, is it possible that you need to terminate one employee?

Pay Down the Highest Interest Debt First –

In order to get your debt-paying efforts in full swing, pay the minimum on all the debts but the one with the highest interest rate. Pay as much as you can towards the high-rate card until it is paid in full. Then, you will have more money freed up to tackle the other debts.

If you have done as much of the above as possible and still are struggling to pay the business debt, consider the following:

Get a zero-interest rate balance transfer card: If you could pay off the debt in the 12 to 18 months at zero interest, a business balance transfer credit card might be a good idea.

Get a debt consolidation loan: If you have more debt than you can reasonably pay off in a year or so, a debt consolidation loan will provide you one payment each month to make on the debt, often at a more attractive interest rate. This system helps create an end-game for the debt. Credit cards just seem to never get paid off at their current rates.

If your landscaping business is struggling due to debt, call us at Keel Associates. We are experts and have solutions to business and consumer debt issues