Dealing with debt can feel like a massive weight on your shoulders, especially for small and family businesses where personal finances and business finances are often entangled. But there’s some good news: the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, has released a guide to help small businesses navigate debt challenges.

The Better Help Guide – Small Business Debt is designed to give you clear, practical steps to manage debt, whether you’re owed money by a customer or trying to figure out how to pay a supplier.

Small business debt on the rise

The Ombudsman says his office has seen a sharp rise in calls from small businesses worried about insolvency – whether it’s their own or a supplier’s.

“We’ve had a 50 per cent increase in calls from businesses concerned a supplier might be insolvent or their own business might be heading that way,” says Billson.

With many small businesses operating on tight cash reserves, Billson says even a single missed payment can trigger a domino effect.

“Cash flow is the oxygen of enterprise. Yet surveys show that cash reserves for 60 per cent of small businesses are low or even zero, leaving no buffer when payments are delayed,” Billson explains.

Practical steps to ease the pressure

The guide encourages businesses to take proactive steps to deal with debt. For those who owe money, offering to pay part of the debt and setting up a payment plan can go a long way.

“Paying any part you can and proposing a payment plan demonstrates good faith and can be a starting point for discussion,” Billson advises. “This proactive approach may reduce the risk of legal action and unnecessary interest charges.”

For businesses chasing overdue payments, the guide helps you understand your options and find realistic solutions.

“Businesses usually want to keep working with each other,” says Billson. “But they often struggle to find a pathway to resolve disputes. That’s where we can help.”

Free support from the Small Business Debt Helpline

If you’re feeling overwhelmed, you’re not alone. Debt can be incredibly stressful, especially when your identity is so closely tied to your business.

“Many small business owners have invested a lifetime – and often their life savings or family home – into building their business,” Billson says.

That’s why the Ombudsman’s office doesn’t just stop at advice. The Small Business Debt Helpline, operated by Financial Counselling Australia, offers free, independent, and non-judgemental support. You can call 1800 413 828 or use their web chat service to speak to qualified financial counsellors who can help you get back on track.

The ripple effect of unpaid debts

One of the key messages from Billson is that unpaid debts don’t just hurt one business – they can cause problems across the supply chain. “When a business doesn’t pay their bills, it can cascade through the supply chain, causing economic harm to others,” he explains.

For small businesses, this means doing your best to pay on time isn’t just about protecting your own operations; it’s about keeping the wider business community afloat.

“A good business pays its taxes, proper employee entitlements, and its small business suppliers in a timely way,” says Billson.

Act now before there are consquences

Debt doesn’t have to spell the end of your business. With the right steps and a bit of support, you can find a way forward. Billson’s advice? Don’t wait.

“Acting early can make all the difference,” he says.

Whether you’re owed money or owe it, reaching out for help could be the key to protecting your business and your peace of mind. The Better Help Guide – Small Business Debt is available now and could be the first step towards easing your financial stress.

If you’re feeling the pressure, don’t hesitate to call the Small Business Debt Helpline at 1800 413 828 or check out their web chat service. The Ombudsman’s free guide is available at: asbfeo.gov.au/debt

Want more? Get our newsletter delivered straight to your inbox! Follow Kochie’s Business Builders on Facebook, Twitter, Instagram, and LinkedIn.