How to Restructure Debt, Negotiate Better Terms, and Prioritize High-Interest Debts in Your Small Business

If you're a small business owner staring down the barrel of a mounting pile of debt, you're not alone, and you’re definitely not doomed.

Managing debt is a reality for most businesses at some point. The key isn’t to avoid debt altogether (that’s a fantasy for most startups and growing operations); the key is to manage it smartly.

That means restructuring what you owe, negotiating better terms with lenders or vendors, and attacking those high-interest debts like they just insulted your grandma.

Small business debt in context: According to the Federal Reserve’s 2024 Small Business Credit Survey, 63% of small employer firms have outstanding debt. Of those, nearly one in four reports that debt is a significant financial challenge. So if you're feeling the pressure, you’re in good company.

Let’s break down the game plan.

Step 1: Take Inventory (Yes, Even the Ugly Stuff)

Before you can restructure or prioritize anything, you need to know exactly what you’re working with. That means pulling out every loan statement, credit card balance, vendor agreement, line of credit, whatever obligations you’ve got, and lining them up in a spreadsheet. For each, you want to list:

• Outstanding balance

• Interest rate

• Minimum monthly payment

• Maturity date or term

• Collateral (if any)

• Payment history/status

This process can be a little humbling, especially if you’ve been ignoring a few past-due notices or have a credit card with an APR that looks like it belongs in a payday loan commercial. But facing it is the first real step to fixing it.

Step 2: Restructure Like a Pro (Or Hire One)

Debt restructuring isn’t just for big corporations with teams of lawyers. Small businesses can do it too, and they should. Restructuring means modifying the terms of your existing debt to make it more manageable. You might aim to:

• Extend the repayment period

• Lower the interest rate

• Reduce the principal

• Consolidate multiple debts into one

How do you do this? You ask. Call your lenders. Be honest about your situation. You’d be surprised how willing some creditors are to work with you if it increases their chances of getting paid. Some might even offer temporary forbearance or deferment if you’ve been consistent until now.

And if you’re not the negotiating type? Bring in a third party. Firms like Procuris Consulting specialize in helping small businesses navigate these financial conversations without burning bridges, or time you don’t have.

Step 3: Prioritize High-Interest Debt Like It’s a Fire Drill

Not all debts are created equal. A $20,000 loan at 4% interest is far less toxic than a $7,000 credit card with a 28% APR. Those high-interest debts are the ones draining your cash flow and stacking up costs month after month.

According to the U.S. Chamber of Commerce, the average small business credit card interest rate in 2025 is 19.85%, and that's assuming your credit is decent. If your rate is higher, you could be paying thousands a year just to keep your balance from growing.

Use the avalanche method: Pay minimums on everything else, and throw every extra dollar at the highest-interest debt first. Once that’s gone, move to the next highest. It’s not glamorous, but it works. Fast.

Step 4: Don’t Forget the Human Side

Negotiating and restructuring can feel like you're going into battle. But don't forget there's a human on the other end of that email or phone call. Creditors want to get paid. If you can make a case for why working with you increases their odds of repayment, you’ve got leverage. And if you're bringing in help from a firm like Procuris Consulting, they’ll handle that for you, using the right tone, the right numbers, and a whole lot of experience.

Step 5: Stay Proactive, Not Reactive

Once you’ve got a plan in place, set up systems to prevent this from happening again. Automate payments, create a debt tracking dashboard, and do monthly check-ins, even if it's just you and a strong cup of coffee. Small tweaks today can save big headaches tomorrow.

Final Thought: Debt Doesn’t Have to Be a Death Sentence

Debt is a tool. It’s only a problem when it’s mismanaged or ignored. By getting organized, restructuring smartly, and prioritizing what’s hurting your bottom line most, you can get back to what you do best: running and growing your business.

And if it all still feels overwhelming, that’s okay. You don’t have to do it alone. Procuris Consulting is here to help small businesses like yours take control of their finances, renegotiate with confidence, and come out stronger on the other side.

You’ve built something worth fighting for. Don’t let bad debt bury it, restructure it.