Managing business loans successfully

Property Investor

Taking on a loan for your business can sometimes give it the shot in the arm it needs to really get it going. Having debt hanging over your business’ head doesn’t have to be a bad thing, and if you manage the debt well it could be the best thing to happen to it.

Keep a good credit score

If you’ve got a good credit score you’ll have more leverage to negotiate your debts with your lender. For example you could arrange terms that allow you to pay the debt off faster or with reduced minimum payments.

To review your score you can contact credit reporting agency Veda.

Your score will be affected by factors such as your payment history, borrowed amount to available credit ratio, length of credit history, types of debt and number of credit applications applied for.

Avoiding new debt

Managing debt by being disciplined and not borrowing more than you can afford means cutting costs or increasing sales if things get tight rather than borrowing more.

Another way to avoid borrowing too much is to consolidate your existing loans. A good example would be to transfer your company credit card debt to a 0% interest account so you can pay it off without getting hit with heavy interest charges. A second common way to consolidate loans is to move a high interest rate loan onto a secured loan like a mortgage.

It’s always a good idea to go through all of these sorts of options first, before taking the plunge with new debt.

Pay down debt when you can

If things are going well at a certain time, it’s usually a good idea to take advantage by paying down your debt with more than just the minimum repayments. A lot of businesses have better seasonal sales periods than others so make hay while the sun shines and pay down your loan.

You could also use the hot sales period to put money aside in an emergency fund to have there to make repayments for when times might get tougher.

When sales are hot it can also be a good time to shop around for a loan while you’re making money and have a good credit score, you have leverage to re-negotiate your loan’s interest rate with either your existing lender or a new lender.

Getting Government assistance

Australia’s Federal Government tries to encourage small business wherever it can, and offers a number of grants and resources to help them along.

Your first point of call to look into what you might be entitled to is to contact the Australian Small Business Advisory Services which offer low-cost information advice.

You can apply for business grants through the Entrepreneurs’ Programme.

Talk to your lender

If things are tough and you’re struggling to make repayments on your company debt, talk to your lender, they aren’t robots who won’t listen to you and try to help you meet payments. Talk to your lender instead of just staying quiet and missing payments.

In certain circumstances, lenders could try to help by extending loan terms, reducing repayment amounts in the short-term, reducing the interest rate, putting a short-term stop to repayments or putting in place a debt settlement.


Managing your business loans well and capitalising when times are good should mean you pay your debt off comfortably and before time and hopefully the debt does its job and fires your business upward and onward.

Speak to Perry Finance today about the best options for managing your business loans.


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