Ask a CFO with James Vanreusel – Effective Strategies to Eliminate Company Debts
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In this episode of “Ask a CFO,” we talk about the crucial question of how to strategize to get all your company’s debt paid. It might not sound like the wildest ride in the financial theme park, but managing debt is crucial for success, and our host has some insights to share.
Here are three key takeaways from this episode:
Key takeaways:
- Debt Management is Critical for Fundraising: excessive debt can hinder a company’s ability to raise funds and grow. While debt itself is not inherently bad, it’s essential to be cautious about the types of debt you take on.
- Prioritize Debt with Personal Guarantees: paying down debt with personal guarantees should be a top priority. Debt with personal guarantees can significantly increase stress levels if the company encounters difficulties.
- Consider Debt Rollover and Forward-Looking Projections: For certain types of debt, such as venture debt, renegotiation and rollover options can be explored. It’s crucial to have forward-looking projections to understand when debt payments will come due and align fundraising milestones accordingly. Equity investors are more interested in supporting business growth than in paying down existing debt.