Business debt reduction plan template

Get every facility onto one page

Debt feels heavier when it's scattered across statements. The first step is simply to see all of it at once. Build a single table — the template below — listing every business borrowing you hold: loans, overdraft, credit cards, asset finance, director's loan, and any tax instalment arrangement. Until it's all in one place you can't choose what to clear first.

Pull the figures from your latest statements so the balances and rates are current. Total the monthly repayments at the bottom; that figure is what your debt costs your cash flow every month, and it's the number this plan exists to bring down.

The plan template

Facility	Balance	Rate / cost	Min. monthly	Priority
e.g. Credit card	£8,000	High	£240	1
e.g. Overdraft	£12,000	Med-high	£150	2
e.g. Term loan	£30,000	Fixed	£620	3
e.g. Asset finance	£15,000	Low-fixed	£310	4
Total	£65,000	—	£1,320	—

Figures are illustrative. Copy the rows, replace with your own, and set the priority column using one of the two methods below.

Choose avalanche or snowball

There are two proven ways to order repayment. Pay the minimum on everything, then throw every spare pound at one target facility until it's gone, then roll that freed-up payment onto the next.

• Avalanche — target the highest-cost facility first (usually cards or overdraft). This clears the most expensive debt soonest and saves the most money overall. Best if you can stay disciplined.
• Snowball — target the smallest balance first, regardless of rate. You clear whole facilities quickly, which builds momentum and frees up monthly repayments fast. Best if motivation is the hard part.

Avalanche is mathematically cheaper; snowball is psychologically easier. Either beats spreading spare cash thinly across all of them.

Find the extra repayment

The plan only works if you can put more than the minimum against your priority facility. Two places to look. First, working capital: faster debtor collection and tighter stock release cash without cutting anything — see the cash-flow troubleshooting guide. Second, the repayments you free up: each time a facility clears, its whole monthly payment rolls onto the next target, so the plan accelerates by itself.

Set a fixed monthly "debt payment" figure above your total minimums and treat it as a fixed cost. Review the table monthly, update balances, and watch the priority list shorten.

Where consolidation fits

If you're juggling several high-cost facilities, replacing them with one cleaner facility can cut both the cost and the admin — one payment, one date, often a lower blended cost. It helps when the new facility genuinely costs less and you don't simply re-borrow on the cleared cards. Run the numbers first with the debt consolidation calculator and true cost of borrowing calculator.

A short-term business loan from Credicorp can consolidate company borrowing into a single, predictable repayment — lent to the company, with no personal guarantee. This is educational information, not financial advice; consolidation only helps if it lowers your true cost.