Plan well and manage your debt |Lesaffaires.com

By fashionlifeshopping 02/08/2022 1275 Views

A debt can constitute a privileged growth lever for your business.In order to draw all the advantages, however, it must be planned and manage it.Experts from PME MTL, the business support network in the city of Montreal, explain how to go about it.

Even if the pandemic has forced many entrepreneurs to borrow in an emergency, in normal times, a debt is planned over a long period, recalls Nicolas Roy, Director General, PME MTL Center-Ville."But it is never too late to make a plan, even if you already have a debt!This planning will promote money entries, limit expenses and better manage the current debt, but also future.»»

1.Prepare

Contract debt cannot be improvised.Before going to meet potential lenders, we must prepare adequately, in particular by asking a few essential questions.We start by carrying out a precise analysis of the needs and establishing financial forecasts.For this, we ask for submissions from suppliers for purchases or investments to which we destine the loan."You must avoid going into debt more than necessary and to end up with an additional interest charge. Si cela se produisait, il est néanmoins possible de mettre sur pied une stratégie de placement de l’emprunt excédentaire»», précise Nicolas Roy.

We must also ensure that we will have liquidity to reimburse the loan. « Au moment de la planification initiale, il faut garder en tête que si l’on contracte, à titre d’exemple, un prêt de 50 000 $ sur cinq ans, cela représente des versements mensuels d’environ 1 000 $, incluant le capital et les intérêts»», indique-t-il.We will therefore have to wonder if the investment will be able to generate these amounts.

2.Build a solid plan

Bien planifier et gérer sa dette | LesAffaires.com

Show you providing before contracting a debt: develop a quarterly plan including income forecasts as well as the concrete actions to be taken according to different possible scenarios (optimistic, realistic and pessimistic)."To deal with any eventuality, also establish a procedure in the event of unpredictable events such as a health crisis, a sick employee or the loss of a major client. Prévoyez aussi un fonds d’urgence pour couvrir quelques mois d’activité»», recommande Nicolas Roy.

Be careful, because companies have easily had credit to compensate for the difficulties caused by COVVI-19.Several have notably used the emergency account for Canadian companies (CUEC), the regional assistance and recovery fund (FARR) or the Small and medium -sized emergency Aid program (PAUPME)."This is why donors, before granting an additional loan for a new project, will want to see how the debt contracted during the pandemic was managed in the context of the continuity of the activities of the company. D’où l’importance d’avoir un plan afin d’inspirer confiance»», prévient l’expert.

3.Make your loan

As we know, the current conditions for loans are simply exceptional: low interest rates, prolonged payment moratories, etc..Despite these attractive modalities, we must take the time to shop."Interest rates should not be the only factor to consider.There are other costs to be assess, such as the costs of opening a file, administration costs, required financing conditions, such as personal, corporate bond, the fact of having taken out life insurance, etc.»», énumère Annie Perreault, directrice services-conseils et financement, PME MTL Centre-Ouest.

Another element to take into account: some lenders are specialized in specific activity sectors, such as TI, life sciences, manufacturing, etc..Finally, it is important to seek to establish a long -term relationship with his lender.It will become over time an ally of the company, in the right periods as in the most difficult.

4.Have healthy debt management

Once you have contracted your loan, it may be added to other company debts.How to do a healthy debt management?It is necessary to proceed in order of priority and to reimburse those whose interest rate is the highest first."We must also consider the specific requirements. Par exemple, si un prêt est assorti d’une subvention, le prêteur pourrait réclamer que celui-ci soit remboursé en premier»», remarque Annie Perreault.In this sense, a global vision of the situation will make it possible to make more wise decisions.

"It is of the same capital to have an up -to -date cash budget which will provide a clear presentation of the real financial position of the company. C’est de cette manière que l’on pourra respecter sa capacité de payer et réagir en cas de coup dur»», renchérit Nicolas Roy.

Whatever your project, SME MTL experts are there to help you and provide you with the necessary advice and resources to support your growth.Feel free to contact them !

Left: Nicolas Roy.Right: Annie Perreault.

6 tips to optimize business resources in business

1.Review the cost cost by integrating the new variables associated with COVID-19 in order to optimize the profitability of activities;

2.Segment your customers and identify the most lucrative sources.Question contracts or customer accounts generating fewer funds, even if it means refusing some if necessary;

3.Determine expenses that create value and eliminate those that do not produce it;

4.Make financial forecasts over six or twelve months to better identify the real needs of your business;

5.Develop management tools, such as a cash budget, and update their update frequently;

6.If you need to reduce the workforce, be sure to keep a powerful team in place.

How to manage purchases in a company