Getting out of business debt comes down to three moves: stop the cash leak, talk to the people you owe before you miss a payment, and refinance or get help if the payments still don’t fit. The order matters, and so does which debts have your name on them personally.
A lot of people paying off student loans also run a side business, and that’s where this gets risky. When the business struggles, it’s tempting to skip a student loan payment to cover a business bill. Don’t make that trade until you’ve read the last section.
The short answer
- List every debt with its rate, payment and whether you personally guaranteed it.
- Cut costs and raise cash before you borrow more.
- Call lenders and suppliers early. Changed terms are easier to get before you’re late.
- An SBA 7(a) loan can refinance current business debt. SBA microloans can’t.
- SCORE mentors are free, and they’ve seen this before.
1. Write down exactly what you owe
You can’t fix what you haven’t added up. Make one list with every business debt: who you owe, the balance, the interest rate, the monthly payment and the due date.
Then mark the ones you personally guaranteed. A personal guarantee means the lender can come after you, not just the business, if the business can’t pay. Those go to the top of your worry list even when the rate is lower.
2. Cut the costs that don’t earn
Most business debt grows out of a few expenses that never paid for themselves. Go line by line and ask one question: does this bring in more than it costs? Office space you barely use, software nobody opens and pricey phone plans are usual suspects.
Cut those first.
3. Raise cash from what you already have
- Sublet space you’re not using.
- Sell old or unused equipment.
- Chase unpaid invoices. Money customers owe you is the cheapest cash you’ll ever get.
- Ask good customers for deposits or faster payment on new work.
4. Rebuild the budget around the debt
Match what comes in each month against fixed costs like rent and utilities, leave room for the costs you can’t avoid, and point what’s left at the debt. Accounting software or a budgeting app makes this a lot less painful.
5. Pay the right debt first
In general, the highest interest rate goes first, since it costs you the most every month. The exception is anything you personally guaranteed or anything secured by an asset you can’t run without. Keep those current even while you pay extra on the expensive stuff.
Bottom line: protect what’s tied to you, then go after the costly stuff.
6. Call your lenders before you’re late
Lenders would rather get paid slowly than not at all. Call, explain what happened and ask for a lower payment, a longer term or a short break. If they agree, get the new terms in writing and then stick to them, because a second miss is much harder to talk your way out of.
7. Renegotiate with suppliers
If you’ve paid a supplier on time for years, that history is worth something. Ask for longer payment terms or a discount on bulk orders. Teaming up with other small businesses to place bigger orders together can get you better prices too.
8. Refinance or consolidate, carefully
Rolling several short-term loans into one longer loan can cut the monthly payment. It can also cost more in total interest, so compare the total cost, not just the payment.
The SBA’s 7(a) program is worth a look because it lists refinancing current business debt as an allowed use. A few things to know:
- SBA doesn’t lend the money. You apply through a lender, and SBA guarantees part of the loan.
- The maximum 7(a) loan is $5 million.
- The business has to be operating, for-profit and in the U.S., creditworthy, and unable to get the credit on reasonable terms elsewhere.
- SBA microloans (up to $50,000) can’t be used to pay existing debts, so they won’t help here.
SBA’s Lender Match tool connects you with SBA-approved lenders. If you’re still deciding whether a loan is even the right move, our guide to startup financing for young entrepreneurs covers the other ways small businesses raise money.
9. Get free help before you pay for it
SCORE mentors give free advice on financing and business planning by email, phone or video. Small Business Development Centers offer counseling on things like financial management and access to capital, and Women’s Business Centers offer free to low-cost counseling. You can find all of them through SBA’s resource partners page.
Be careful with paid debt relief companies that promise to settle your business debt for pennies. Get a second opinion from one of the free options first.
10. Cut payroll last, and know when to call a lawyer
Layoffs hurt the business you’re trying to save. Try cutting hours or temporarily changing pay first. And if the numbers still don’t work after all of this, a bankruptcy attorney can tell you what your options are. A consultation costs far less than another year of digging deeper.
Don’t let business debt sink your student loans
If your business income drops, your federal student loan payment can drop with it. The Repayment Assistance Plan (RAP) bases your payment on your adjusted gross income, and the minimum is $10 a month.
Example: a single borrower, no dependents, on RAP
- AGI $60,000
- $250/mo
- AGI $35,000
- $87.50/mo
How we got it: RAP takes a percentage of your whole AGI that rises with each $10,000 band. $60,000 falls in the 5% band ($3,000 a year, or $250 a month). $35,000 falls in the 3% band ($1,050 a year, or $87.50 a month). The new payment applies once your income is recalculated.
Forbearance looks easier, but interest builds up on every loan type while you’re in it. A lower RAP payment usually beats a paused payment that keeps growing. Compare your plans in our RAP calculator or the student loan repayment plans guide.
Next stepOnce the business is steady again, see our guide to making money to pay off student loans
List every business debt with its balance, interest rate, monthly payment and due date, and mark any you personally guaranteed. Then cut costs that don’t earn and raise cash before borrowing more.
An SBA 7(a) loan can. Refinancing current business debt is an allowed use, the maximum is $5 million, and you apply through a lender. SBA microloans can’t be used to pay existing debts.
SCORE mentors give free advice on financing and business planning. Small Business Development Centers and Women’s Business Centers also offer counseling. SBA’s resource partners page lists them.
Be careful. Interest builds up on all loans in forbearance. If your income dropped, an income-driven plan like RAP bases your payment on your adjusted gross income, with a $10 minimum, which may cost you less over time.
Sources (6)
We use primary sources wherever we can: Federal Student Aid, the U.S. Department of Education, the IRS, federal regulations and each company’s own site.
- U.S. Small Business Administration. 7(a) loans. sba.gov. Accessed October 22, 2026.
- U.S. Small Business Administration. Microloans. sba.gov. Accessed October 22, 2026.
- U.S. Small Business Administration. Loans. sba.gov. Accessed October 22, 2026.
- U.S. Small Business Administration. Resource partners. sba.gov. Accessed October 22, 2026.
- Federal Student Aid. Income-Driven Repayment Plans. studentaid.gov. Accessed October 22, 2026.
- Federal Student Aid. Get Temporary Relief. studentaid.gov. Accessed October 22, 2026.
