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 Pub Debt Management

 Using Credit, Cash Flow and Manipulating your Debt, Tips

Wise use of Credit and Debt Advice from Chris Wright at Twinpier

It’s worth noting credit and its availability is often crucial to the success of most businesses, what any successful business uses credit for is to buy assets and expand. When used properly credit can be a great tool to grow a business, such as building extensions, upgrading kitchens, bring letting rooms into use, pay for training courses or even help pay for extra staff during busy periods. However almost all assets cost money to manage and a business should always factor the cost of asset management before borrowing. Should you borrow too little you will find yourself falling back on credit to cover these costs.

Unfortunately in the majority of cases credit is being used not to buy assets but to pay for everyday bills and goods, whilst this kind of approach can see you through a sticky patch it often comes at a very high cost. Typically credit cards or overdrafts once “maxed out” people will find themselves simply paying the minimums,  these debts are then usually consolidated into a loan (by a lender), with the cards / overdraft now clear again unless you have the discipline to chop them up they get used again very quickly. Once debt reaches a significant level the repayments to creditors are too big to be serviced, effectively you’re paying interest on top of interest along with any penalties for late payments, going over your limit and bounced direct debits etc it starts snowballing often coming to a stop only with insolvency action. However there are some simple tips to stopping things getting worse.

• Open a separate bank account, one which is not linked to any debt or borrowing you may have, this is vital.
• Don’t bury your head the situation is unlikely to get better on its own, open all letters read them and keep them.
• Plan carefully before being tempted to borrow money to pay off debts, often it can be a case of out of the frying pan and into the fire, you will need a solid plan worked out in advance to know if its really viable, only in a very few cases would borrowing be advisable.
• Check if you have any insurance policies which could claim on, also check to see if you can apply to any benevolent or trust funds for financial help such as www.licensedtradecharity.org.uk
• Maximise your income, check entitlements to benefits and tax credits
• Make a budget and stick to it, this is an effective brake to avoid overspending.
• Make sure you know who your priority creditors are, this is not always obvious as the important ones don’t shout that much, it’s usually the non-priority ones who are most vocal.
• Do not deal with debt on the phone, get everything in writing, contact creditors in writing too, phone conversations are often denied or forgotten about at a later date, keep copies of any letters you send.
• Get saving! The key is avoiding debt in the future and for getting out of debt now is savings. Almost everyone we have advised in debt has the same underlying problem, they have no savings. It really doesn’t matter what you earn as we have advised clients on £50 pw and even those on £100,000 pa, if you can’t save any of what you earn you are leaving things in the hands of fate. Without a doubt something somewhere will go wrong, break or pop up unexpectedly in the near future. If you don’t have your own money to fall back on you will borrow someone else’s, bear in mind there is nothing cheaper than borrowing from yourself!

• Can’t manage, don’t know where to turn? Can’t manage, don’t know where to turn? Twinpier is a specialist at helping people in the licensed trade, if you require confidential advice on a debt or credit problem contact Chris Wright on 01825 830422 or 07502214457 admin@twinpier.co.ukLicensed by the consumer credit act 597380