Evaluate and Adjust Liabilities

By Alan Miklofsky | October 19, 2024

Debt can be both a tool and a burden for retailers, impacting cash flow and overall financial stability. It’s essential to evaluate and adjust your liabilities regularly to ensure that your business remains solvent while minimizing excessive interest expenses. Here are some strategies to keep your debt in check:

Consolidate Loans: Simplifying your debt structure can be a smart move for managing liabilities. By consolidating multiple loans into a single one, you can reduce the complexity of your payments and often secure a lower interest rate. This approach not only streamlines your financial obligations but can also lead to significant savings over time.

Refinance at Lower Rates: Periodically exploring refinancing options can help you secure more favorable terms. Whether through commercial banks or Small Business Administration (SBA) loans, refinancing at lower interest rates can decrease your monthly payments and reduce the overall cost of debt. This strategy enables you to allocate more resources toward growth and operations rather than servicing high-interest liabilities.

Manage Lease Commitments: Lease obligations can be a significant source of long-term liability for retailers. Whenever possible, renegotiate lease terms to obtain better conditions or consider transitioning to ownership of real estate. Owning property can alleviate some long-term costs associated with leasing and provide additional financial stability for your business.

Balancing your liabilities is crucial for ensuring your shoe store’s financial health. By consolidating loans, refinancing for better rates, and managing lease commitments effectively, you can maintain a healthier balance sheet and avoid the pitfalls of excessive debt.