The old saying goes that you have to spend money to make money, and it's especially true for small business owners.

Proper finance for your small business can involve taking out a few loans. The US Small Business Administration estimates that 73% of all small operations used loans in the past 12 months.

A loan can easily cover operating expenses and employee salaries. Taking on a little debt can help your business, but if you don't know how to keep it under control it can start to cause more problems than it helps.

If you're worried about properly managing your business debt, we have you covered. We're going to teach you how to properly manage your debt.

Finance For Your Small Business: Debt Management In Five Steps

Taking out a small business loan can be easy, keeping up with it because of unexpected problems is tough.

You may need more employees than you previously thought you did. Business may be slower than you anticipated, or you may have trouble keeping up with unexpected growth.

Regardless of what happens, you can keep your head above water and properly manage your debt as long as you follow our advice. If times get tough, remember these five easy tips.

1. Avoid Taking On More Debt (If Possible)

Adding on more debt to a situation you already can't financially handle is a sure way to run your business into the ground. If you're having trouble managing the debt you have, adding more most likely isn't the answer.

There may be some situations where taking on more debt may be an inevitability.

If a small loan is the only thing that can mean the difference between staying open for another day or closing shop, it may be worth it to take on more debt. But in most cases, taking on more debt could be delaying the inevitable.

If you're already in financial trouble, don't make things worse for yourself. Talk to a professional financial planner if you're on the fence about whether or not more debt is the right thing to take on.

2. Re-Examine Your Budget

Are you worried about falling behind on your monthly payments? Do formally easy deadlines and payment amounts seem like too much to manage?

If you're struggling to pay off your debt, it's time to take another look at your budget.

A well-balanced business budget can help you easily identify your income sources, fixed costs, and variable expenses. A proper budget can also help you get into the habit of setting aside money to pay your landlord and creditors.

You may be able to easily handle setting your personal budget, but business budgets can be a little more complicated.

If you're concerned about setting your budget, don't be afraid to get some insight from an outside source. Your accountant or bank can help set you up with an easy to follow budget for your business.

If you're worried about affording professional help, use accounting software like Quickbooks that can track the money that's flowing in and out of your business.

3. Reduce Your Expenses

Now that you have your business budget fully fleshed out, it's time to use it to see what you can afford to cut back on.

You're facing difficult financial times, and when times are tough it's time to cut back on what isn't absolutely necessary to keep your business running.

This is why having a budget is so important. When times are tough, you need to know where your money is going and what you can afford to cut back on.

Have you been paying dues or subscription fees to professional organizations? Do you feel like you've been spending a lot of money on printer ink? Examine everything that requires money, even small costs can add up.

When we mention reducing expenses, we aren't just talking about office supplies. If times are very tough, it may be time to examine what your business is paying in employee costs.

When you have to reduce employee costs, that doesn't automatically mean firing them. You may resort to rolling back hours or making some salaried employees hourly.

If you're considering cutting costs with your employees, make sure that you can properly run your business without them. Getting rid of an essential employee could end up costing you more money in the long run.

4. Communicate With Lenders

When some people have trouble paying their loans they start to ignore calls and emails from lenders, but that could be one of the worst things you can do.

Lenders want you to be able to pay off your debt, and many will do what they can to help you make monthly payments.

Once you've taken some time to adjust your budget and see where you can cut cost, determine how much you can realistically afford to send your lenders every month.

Now that you have your monthly payment amount in order, it's time to contact creditors and talk to them about your financial situation. Tell them how much you think you can afford to pay, then see where you can meet in terms of payments.

Be sure to ask lenders about any loan-consolidation programs they may have available. They may be able to group multiple loans together into a single monthly payment.

If things are especially dire, you may be able to qualify for a loan hardship plan that can include a higher interest rate and payment extensions.

5. Dedicate Yourself To Repayment

Now that everything is in place to start paying off your debt, every extra dollar you earn needs to go towards repayment.

After a serious financial scare, it can be tempting to try to treat yourself or your employees when money starts to come in. A fancy employee outing or a raise is fun in the short term, but running a debt-free business is better in the long term.

Don't stop doing steps 2 and 3 because you're seeing the light at the end of the tunnel. Constantly re-examine your expenses and budget so you can allocate more money towards your debt.

Going Beyond Debt Management

Things may seem tough now, but the rewards will be worth it. Plenty of people have successfully used their loans to create successful businesses, and you can easily be one of them.

Are you ready to take the future into your own hands, and sort out the finance for your small business? Let us help you build something great.

Contact us so we can start a conversation about the best way to fund and grow your business.