Small Business Debt Management Guide

For many small business owners, managing money is one of the toughest and most time-consuming parts of running a business. Between tracking expenses, juggling payments, and keeping cash flow steady, it’s easy to feel like you’re constantly putting out fires, especially if debt has started to pile up.

Business loans, lines of credit, and credit cards can all be powerful tools to help your business expand. They can fund new equipment, support new staff, or bridge slow periods. But when the repayments start feeling unmanageable, it’s a sign to review your small business debt management strategy before things snowball.

We help business owners turn financial overwhelm into clarity and confidence. Here’s how to regain control of your debt so you can get back to growing your business with a clear head and a solid plan.

1. Get Full Visibility: Rank and Review Your Debts

The first step to effective debt management is understanding the full picture. Create a list of all current debts; bank loans, credit cards, ATO liabilities, supplier accounts, and any informal arrangements. Record the interest rates, repayment terms, due dates, and any penalties for late payments.

Then, prioritise the debts with the highest interest rates or those posing the greatest risk (like ATO debt). Addressing these first can reduce long-term costs and protect your business credit score.

Extra tip: Set up a simple weekly or monthly “money meeting” to review balances and payments. Consistency builds confidence and reduces surprises.

2. Consider Debt Consolidation to Simplify and Reduce Stress

Managing multiple repayments can feel like a part-time job. Debt consolidation allows you to combine several debts into one repayment, helping you avoid missed deadlines, reduce admin time, and sometimes even secure a better interest rate.

However, consolidation isn’t always the right move. Before committing, it’s wise to seek professional advice from your accountant or financial advisor to ensure the new structure genuinely improves your cash flow rather than simply stretching the debt out over more years.

Extra thought: Some lenders also offer refinancing options that allow interest-only periods for short-term relief, but these should be approached carefully to avoid increasing long-term costs.

3. Boost Revenue to Build Momentum

One of the most effective ways to take control of debt is to increase the cash coming in. This may mean refining your offering, adjusting your pricing, improving client retention, or exploring new markets.

We regularly help clients optimise their invoicing systems, tighten payment terms, and introduce automated reminders, simple changes that speed up cash collection and support healthier cash flow.

Additional ideas:

• Offer early-payment incentives to customers

• Review your product or service mix to focus on your most profitable offerings

• Explore recurring revenue models (memberships, retainers, or ongoing service packages)

4. Reduce Costs Without Compromising Quality

Good debt management isn’t just about earning more, it’s also about spending wisely. Review your subscription list, supplier agreements, and general operating costs. Many businesses are surprised to find how much they can save with small but strategic adjustments.

Look for cost-saving opportunities like:

• Renegotiating supplier contracts

• Switching to energy-efficient tools or appliances

• Outsourcing tasks that cost less to delegate than to do internally

• Automating manual processes to reduce labour hours

Even minor savings can make a meaningful difference when applied consistently.

5. Seek Professional Support Early—Not When It’s Too Late

Debt issues rarely fix themselves. If things are starting to feel overwhelming, reaching out early can prevent further stress and protect your business.

A qualified bookkeeper can help you assess your current position, develop realistic repayment strategies, and put systems in place to avoid recurring problems. We work side-by-side with business owners to bring structure, clarity, and peace of mind to their financial operations.

We help you understand what the numbers really mean and build a path forward that feels achievable—not intimidating.

The Bottom Line

Debt doesn’t have to define your business or your future. With the right approach, you can regain control, improve cash flow, and build long-lasting financial stability.

By reviewing and ranking your debts, simplifying repayment structures, increasing revenue, and keeping costs lean, you’re setting your small business up for sustainable success.

If you’re ready to get clear on your numbers and build a tailored small business debt management plan, Sherpa is here to guide you. We’ll help you see where your money is going, streamline your systems, and support your next steps with confidence.