Guide

Business debt: help and advice

When and how to seek debt help

It is always very stressful facing financial problems as a business, but there is often help and advice available to help you tackle them before it gets too much to handle.

Before you seek advice about your financial problems, there are certain actions that you can take to minimise their impact, or even reduce your debt burden.

Improve your financial situation

To try and improve your finances, you should:

  • calculate your total debt and decide how much you can afford to repay each month
  • inform your creditors as soon as possible if you are finding it difficult to pay, you may be able to renegotiate your payments, such as spreading them over longer periods or waiving interest
  • tackle any priority debts first - eg rent and utility bills
  • assess whether you can improve your cashflow management

If you can't improve your financial situation yourself, or if your debt problems are too much to handle, there are several debt advisory bodies who can offer advice on business debt. See find advice on debt.

You may also decide to borrow money to help you deal with your financial problems in the short term. However, it is important to always consider the risks fully as it can be dangerous to borrow money in order to solve debt problems. It may help in the short term, but in the long term, you could end up paying more.

Protect your business

You should also be careful when seeking advice or finance - for example, you should:

  • avoid illegal loan sharks as they are not licensed to lend money and often charge high rates of interest - you could find yourself under immense pressure through intimidation if you default on a repayment
  • check the credentials of an organisation before you contact them, and establish what kind of advice is on offer through internet or telephone research -The Financial Conduct Authority (FCA) provides a financial services register for you to check if a lending organisation is accredited by the FCA
  • shop around for the best deal and try to seek free advice first - some companies providing debt management programmes charge a fee and may even charge for providing initial advice