Restaurant debt is not a single problem. It is a category that includes equipment loans, SBA loans, merchant cash advances, landlord arrears, vendor payables, and personal credit cards that got used to cover payroll. Each of those has different terms, different leverage, and different options. The mistake most owners make is treating all of it as one undifferentiated crisis -- which leads to paralysis instead of action.
The first thing to do is make a list. Every debt, every creditor, every balance, every monthly payment, every interest rate, every personal guarantee. Most restaurant owners in financial distress have never seen all of their obligations on a single page. That list is the starting point for every conversation that follows.
The options that actually exist
Vendor renegotiation. Your food and beverage distributors have seen this before. If you are a long-term customer with a history of payment, most will work out a payment plan on past-due balances rather than lose the account entirely. The conversation needs to happen before you miss a payment, not after. Once you are 60 days past due, the leverage shifts.
Landlord arrears. Landlords are often more flexible than operators expect, particularly if the alternative is a vacant space. A formal rent deferral agreement -- documented in writing, with a clear repayment schedule -- is something many landlords will accept. What they will not accept is silence. If you are behind on rent and have not called your landlord, that is the first call to make. The landlord negotiation article on this site covers the mechanics of that conversation in detail.
SBA loan workouts. If you have an SBA loan and you are struggling to make payments, the SBA has a formal workout process. It is not widely advertised, but it exists. An SBA loan workout can result in a temporary payment reduction, a loan modification, or in some cases a negotiated settlement for less than the full balance. The process requires documentation -- two years of tax returns, current P&Ls, a statement of the hardship -- but it is a real option that most struggling operators never pursue because they do not know it exists.
Merchant cash advances. These are the most dangerous form of restaurant debt. MCAs are not loans -- they are purchases of future receivables, which means they are not subject to usury laws and the effective annual interest rates are often 80% to 150%. If you have an MCA, the priority is to stop taking new ones and to negotiate a payoff at a discount if possible. MCA companies routinely settle for 50 to 70 cents on the dollar when the alternative is a default.
Personal credit card debt used for the business. This is common and it is serious, because it means the business debt has become personal debt. The options here depend on the total balance and your personal financial situation. In some cases, a personal bankruptcy filing protects the individual while the business winds down. That is a conversation for a bankruptcy attorney, not a restaurant consultant -- but it is a conversation worth having before the balances become unmanageable.
When to stop fighting
The hardest question in restaurant debt is not which option to pursue. It is when to stop pursuing options and make a decision about the business itself.
The answer depends on one number: can the business generate enough cash flow to service the debt and still cover operating costs? If the answer is yes, the debt is a problem to be managed. If the answer is no -- if the business cannot generate enough cash to pay both its operating costs and its debt service -- then the debt is a symptom, not the disease. The disease is a business model that does not work at the current cost structure.
The Cash Runway Calculator on this site will tell you how many weeks you have at your current burn rate. If that number is under 12 weeks, the debt conversation and the business viability conversation need to happen simultaneously.
If you want a clear read on which category your situation falls into -- manageable debt versus structural insolvency -- book a session with Rod. He has seen both, and he can tell you the difference in one conversation.
Sources: U.S. Small Business Administration -- Loan Servicing and Default | National Restaurant Association -- 2026 State of the Industry