With Debt Awareness Week taking place this week and recent SME debt concerns prompting an eight-week government review, the business finance experts at money.co.uk business credit cards have offered their tips on responsible lending and repayments.

Joe Phelan, money.co.uk business credit cards expert, comments:

“For many SMEs and entrepreneurs, navigating business debt can be both challenging and stressful. However, when managed responsibly, borrowing can be a powerful tool, helping businesses launch new products, expand into new markets, and scale sustainably.

“Of course, poorly planned debt can lead to costly short-term loans and repayment struggles. That’s why financial planning and best practices are essential. Here’s how to stay in control:

1. Borrow wisely: “Before taking on debt, assess what you can realistically afford to repay. Many business owners overextend their budgets, leading to financial strain and missed payments. Consider all potential costs, including unexpected expenses, and always leave a buffer. Explore your lending options to find the best fit. For instance, if you need short-term flexibility, a business credit card (especially with introductory offers) might be a better option than a high-interest loan.

2. Set out a clear repayment plan: “A structured repayment plan is key to staying on top of debt. Always meet at least the minimum monthly payment on all accounts. If possible, make extra payments to reduce your debt faster and improve cash flow. And track interest rates and automatic payments, as late fees add up quickly and can hurt your credit rating.

3. Seek debt advice: “If your business is struggling with debt, don’t wait until it’s too late. Seek professional guidance as and when you need it. A financial adviser or a debt advice organisation, such as StepChange (the founder of Debt Awareness Week), can help you assess your options, create a repayment strategy, or even negotiate with creditors. By approaching debt strategically, you can keep your business financially healthy while positioning it for long-term success.”