How To Start a Small Business While You’re in Debt

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Starting up your own successful small business and getting it off the ground may seem like an unattainable dream while you’re still in debt. Though the actual size of your investment will differ depending on the type of business that you envision to start, even small home-based businesses can rack up into the thousands. 

Trying to juggle between paying off existing bills and loans while finding ways to finance your business can understandably be a difficult task. It could mean you’ll have limited access to traditional sources of company finances such as business loans, or you may find yourself struggling to figure out living costs. 

However, all hope is not lost. With the right steps, your entrepreneurial dreams will become not so distant after all. While every person’s financial situation will be different, there are fortunately useful steps that everyone can take to kickstart their small business while still in debt:

Reduce Monthly Debt Payments

It’s easier said than done, but the first and most obvious step is getting your debt payments under control again by reducing them. To increase your business cash flow and help it stay afloat, there are numerous strategies you can try to reduce your monthly debt payments, such as consolidating your high interest rate credit cards, refinancing any student loans, or even moving to another area where the cost of living is cheaper. 


If you want to move forward and create a stable financial future for yourself, it’s essential to also take the step to educate yourself on relevant financial best practices to avoid any further debt-related mistakes. For example, why not listen to financial podcasts, read self-help books, or find online resources or organisations that can support you in your journey such as with Debt to Success System. 

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Start Slow 

While you’re in the process of paying off debt, you’ll need to start off small to get the ball rolling. It may be tempting to spend the funds you have on more extravagant aspects within your business, but it’s vital to start off slow first. Think low-cost marketing tools such as creating a strong logo, establishing brand presence by creating your social media accounts, and setting up an attractive website. 

Evaluate Your Expenses 

From cutting back staff to evaluating your own personal spending, if you want to start a business while in debt, it’s also crucial to reduce any expenses as much as possible. In turn, this will allow you to save money to invest into your business, and can take the stress off the cost of living while you wait for your business to become more profitable. 


Starting up your own small business will by no means give you a guaranteed income to live off immediately. Taking on a lucrative side-hustle while your business continues to build its profitability in the meantime will not only help you with your personal finances, but it can offer up more funding to invest into your company. This could include taking up a part-time job, blogging, tutoring, or even just using free online buying and selling apps to generate an alternative source of income. 

Explore your Financial Options

If you’re already in debt, you’ll certainly not want to add to the problem by applying for a business loan, at least not straight away. Make sure to explore all of your financial options, for example investing your own personal savings, taking a loan from close friends or family members, or even researching grants that could be available to fund your business. 

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If you are confident that your business idea has the ability to capture the attention of the public, starting up a crowdfund can also be an ideal option to generate funding. For the best results, make sure that you actively promote your company on social media, make interactive videos for your crowdfunding page, and create a plan of what you propose to do after asking for funding. Dividing time to present your business idea in a professional way to others will help to increase your chances of getting the funding that you need. 

Reinvest in your Business

Regardless if you are a budding entrepreneur or not, everyone wants to pay off their debt as soon as possible. However, don’t let this mindset influence you to use your business profits to pay off your own personal debts. To ensure your business keeps growing, you’ll need to invest your profits straight into your company until you are generating a steady income to start paying off debt again.