6. Become a debt-free business.
Continue to maintain and grow your net worth while having a clear, working 3 – 5 year plan to eliminate debt.
Pay off all debt as quickly as possible.
This includes paying off lines of credit and credit card balances in full each month.
We also recommend using the Debt Snowball method to help you pay down business loan balances faster.
Instead of paying off your highest balance first, pay off the smallest loan balance. When your smallest balance is paid off, start making payments toward your next lowest balance, and keep repeating until the debt is paid off.
Debt Snowball Calculator
Make extra payments toward loan balances.
Keep reviewing your budget to find more opportunities to make additional payments. This can include reducing expenses, finding cost efficiencies, and applying any surplus income toward the balance. A $150,000 loan with a 5-year term at 16.25% APR will have $70,060 in interest.
For example by paying an extra $5,000 per month, you could save $47,988 in interest, and own the asset 3.3 years sooner.