Drowning in high loan payments, leaving little cash to reinvest

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Drowning in Debt: How a Retail Store Reclaimed $1,500/Month in Cash Flow

This example illustrates a common situation we’ve seen with retail businesses struggling under the weight of multiple loans. A store was doing steady business, but high loan repayments were choking its cash flow and leaving nothing to reinvest. The debt wasn’t just slowing growth—it was a risk to survival.


Here’s how we turned it around using a structured debt repayment plan:

  1. List Debts from Smallest to Largest
    We used Xero’s Balance Sheet Report to sort all outstanding loans by balance. This provided clarity and helped prioritize the repayment order.

  2. Pay Minimums, Attack the Smallest First
    Minimum payments were maintained across all debts, but any extra funds were applied to the smallest balance. We monitored repayments using Xero’s Account Transactions Report.

  3. Roll Payments Forward
    As each loan was paid off, that freed-up amount was reallocated to the next smallest debt. Xero’s Budget Manager and custom tracking categories helped visualize progress clearly.


The Result:

Within one year, the store eliminated two major debts and unlocked an additional $1,500 in monthly cash flow. This shifted their financial posture from reactive to proactive, giving them space to reinvest and grow with confidence.

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Drowning in Debt: How a Retail Store Reclaimed $1,500/Month in Cash Flow

This example illustrates a common situation we’ve seen with retail businesses struggling under the weight of multiple loans. A store was doing steady business, but high loan repayments were choking its cash flow and leaving nothing to reinvest. The debt wasn’t just slowing growth—it was a risk to survival.


Here’s how we turned it around using a structured debt repayment plan:

  1. List Debts from Smallest to Largest
    We used Xero’s Balance Sheet Report to sort all outstanding loans by balance. This provided clarity and helped prioritize the repayment order.

  2. Pay Minimums, Attack the Smallest First
    Minimum payments were maintained across all debts, but any extra funds were applied to the smallest balance. We monitored repayments using Xero’s Account Transactions Report.

  3. Roll Payments Forward
    As each loan was paid off, that freed-up amount was reallocated to the next smallest debt. Xero’s Budget Manager and custom tracking categories helped visualize progress clearly.


The Result:

Within one year, the store eliminated two major debts and unlocked an additional $1,500 in monthly cash flow. This shifted their financial posture from reactive to proactive, giving them space to reinvest and grow with confidence.