Debt And Credit: From Personal Foe To Business Friend

When it comes to the topic of credit and debt, a lot of us start hearing alarm bells in our ears. We think of personal spending gone overboard, of the financial hiccups that lead us into a spiral of rising debt, and how easy it is to get on the bad side of creditors. However, when you’re starting a business, taking out a loan or using credit cards to finance business purchases aren’t just a useful tool, they might very well be essential. Not everyone can dig into their own pockets to get their hands on the resources they need. So, how can credit and debt become friends of the business instead of sworn enemies?

Credit and Debt

Treat it like a professional

There’s plenty of reason to behave responsibly with credit, to begin with, but now that it’s being used for business resources it’s more important than ever before. Responsible use of credit begins with choosing the ways to fund your business. A business loan might offer the most favorable terms but they’re not available to everyone. There are credit card options specifically for the business which offer easier qualification. Many of them also offer rewards and incentives, like airline miles for business people who need to travel often and bookkeeping assistance apps that owners can access online. Your business should have a monthly “money day” in which you look over the balance, ensure you pay on time and as much back into the card as you can, and figure out how much you can afford to charge to the card next month.

Always have a reduction strategy

Debt can be a tool for good if you keep it manageable. That means always being prepared to take steps to reduce it when you can. When in a bind, you can offer marked-down prices and deals to increase cash-flow, cancel software subscriptions for free replacements, or negotiate with your suppliers. But don’t ignore creditors, either. Tools like can help you arrange your debt into more favorable terms for you. The sooner you get in touch with creditors like your bank or other loan providers, the easier it can be to negotiate and restructure a payment plan, too.

Know where you stand

Credit cards and loans can be a regular tool in your business’s financial arsenal but if you’re not getting the best deal you can be, you are not operating as financially efficient as you can. To figure out whether that’s the case, you need to know your credit score and report through sites like There may be some work you can do in paying off existing debts or challenging erroneous reports in order to repair and improve your credit score. Do that and you’re likely to have more credit options that cost you less in the long run.

Smart management of debt isn’t the end of the world when running a business and a reliable line of credit can come through for you time and time again. Just make sure you never take your eyes off how much you owe and how much you have to pay at any point. Your business and your personal financial health might depend on it.

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