The Small Business Administration approved over 14 million emergency loans in 2020 to provide relief for small businesses hit by the COVID-19 pandemic. While the decision to take on debt may make sense in the right situation, 71% of small businesses in America already held debt in 2019, making the unexpected economic downturn even more precarious – and showing that many small business owners unfortunately see unnecessary debt as a day-to-day reality.
For the companies able to navigate through the pandemic’s challenges, reducing the limiting effects of unwise debt should become a priority. In an article for Forbes and Zenger News, Proven Media Solutions owner Dustin Siggins identified three ways companies should address their debt problems:
- Free up cash to repay debt by reducing unnecessary expenses.
- Increase profits by streamlining operations.
- Reinvest newfound savings for long-term returns on capital.
In the right circumstances, Dustin showed taking on debt can be the right strategy – but only in rare circumstances, and only for opportunities which offer massive opportunities to scale. The key for any business is using debt appropriately to remain flexible and dynamic in the face of ever-changing market environments.
Read the full article here.