5 Simple Tips for Managing Debt in Your Startup

Starting a business is an exciting journey, but let’s be real—debt is often part of the deal.

Whether you borrowed money for initial expenses, stock, or equipment, most startups carry some debt. The biggest challenge here isn’t just taking on debt but managing it in a way that keeps your business healthy and growing.

Don’t worry—you’re not alone in this. Here are 5 practical, straightforward tips that will help you stay on top of your debt, without feeling overwhelmed.

1. Know exactly WHAT you owe and WHO you owe it to

The first step in managing debt is understanding it completely.

Let’s be real – how can you take control of something if you’re not even sure what it looks like?

So, take the time to list out every debt you owe—this means…

total amounts
interest rates
payment deadlines
any fees for missed payments

Why is this important?

Because having a clear snapshot of your debt lets you plan better, meaning you can prioritise what to pay off first and avoid any surprises like missed payments or unexpected fees.

The clearer you are on where your money is going, the easier it’ll be to manage it wisely.

2. Prioritise which debts to pay off first

Not all debts are created equal, and paying them off in the right order can save you a LOT of money and stress in the long run.

So, you want to focus on the debts that cost you the most.

High-interest loans, for example, can snowball quickly and eat into your profits. On the other hand, secured loans (backed by assets like property or equipment) should also be a priority, because if you miss payments, you risk losing those assets.

Why This Works

Paying off high-interest debt first reduces the total amount of money you end up paying over time. And by staying on top of secured debts, you protect your valuable assets from repossession.

Pro Tip:

List your debts from highest interest rate to lowest, and make larger payments on those with the highest rates first.
For secured debts, make sure you're at least covering the minimum payments to avoid losing critical business equipment or property.

This way, you’ll slowly chip away at the debt that hurts you the most, giving you a stronger financial footing to work from.

3. Improve your cash flow to make debt payments easier

Want to pay off debt faster? You need a healthy cash flow.

This means having more money coming in than going out.

Here’s how to boost your cash flow:

Increase sales – Run limited-time promotions or offer discounts to encourage faster customer payments.
Cut costs – Review your expenses and see where you can trim—are you paying for software you don’t use? Could you reduce office space or move to a cheaper supplier?
Chase overdue invoices – Make sure you’re collecting payments on time. You’d be surprised how many businesses have cash tied up in unpaid invoices.

Why Cash Flow Matters

With better cash flow, you can make your debt payments on time and reduce the risk of falling behind. Plus, extra cash means you can make larger payments on high-interest loans, reducing your debt faster.

4. Talk to your lenders to negotiate better terms

Many people don’t realise that lenders are often willing to renegotiate the terms of your loan, especially if you’ve been a reliable borrower so far.

This is because they would rather get their money back on more favourable terms than risk you defaulting. So don’t hesitate to reach out and ask for a lower interest rate, longer repayment terms, or even debt consolidation, which combines multiple loans into one with a single payment.

Here’s how to start the conversation:

Reach out to your lender as early as possible if you’re having trouble making payments.
Be honest about your situation but also prepared with a repayment plan that shows you’re still committed to paying off the loan.

Lower interest rates mean smaller payments each month, giving you more breathing room to manage cash flow.

HOWEVER, longer repayment terms can ease short-term pressure, though you may pay more in interest over time, so weigh your options carefully.

5. Keep reviewing and adjusting your debt strategy

Debt management isn’t a “set it and forget it” process.

Your business will change—sometimes you’ll have great months with plenty of revenue, and other times things may slow down. It’s crucial to regularly review your debt situation and adjust your plan based on your current financial health.

Why This Helps

Reviewing your debt regularly means you can spot problems before they snowball.

For example, if cash flow starts to slow, you might be able to renegotiate payment terms before falling behind. Or if business picks up, you could increase your payments and reduce the overall debt faster.

Take charge of your startup’s debt

Managing debt can feel overwhelming, but with the right approach, it doesn’t have to be.

By following these five simple tips, you’ll not only stay on top of your debt but also set your business up for long-term success.

Remember, debt is a tool—it’s all about how you use it.