8. Renegotiating Leases, Loans and Supplier Contracts - Tactics That Work
Strategies to preserve relationships while improving business terms
1. Introduction
When cash flow tightens or revenue becomes unpredictable, fixed commitments can become heavy burdens. Rent, loan repayments and supply contracts all feel less flexible when times are tough, but in many cases, they are more negotiable than we think.
This article is part of Pillar 2 - Protecting Your Business. It offers practical, relationship-focused strategies to help you renegotiate key agreements. Whether you're dealing with a landlord, a bank or a supplier, the goal is the same - to create breathing space without damaging trust.
2. Representative Narrative
Sione runs a cleaning and maintenance company based in Porirua. His team services commercial buildings, schools and community centres across the region. With public sector budgets tightening and private clients holding off on non-essential work, his income has dropped.
The lease on his depot was due for renewal. His equipment loan had increased with higher interest. Supplier terms were fixed at 30 days. Sione felt boxed in. He didn’t want to burn bridges, but something had to change.
He reached out to John Luxton, a trusted advisor at RegenerationHQ, who’d helped him restructure his pricing model a few years ago. John said, “Now’s the time to lead those conversations, not from panic, but from partnership.”
3. Recommended Actions
Prepare your case before you ask
Before starting any negotiation, gather key numbers - turnover trends, upcoming commitments, payment history and what you’re asking for. Be clear, realistic and specific.Lead with transparency and respect
Most landlords, lenders and suppliers prefer to keep a good client rather than chase a new one. Be honest about your position and show your intent to meet obligations wherever possible.Offer options, not ultimatums
Suggest temporary changes -
Lease - A rent reduction or deferral with catch-up terms
Loan - Interest-only payments for 3 months or a term extension
Supplier - Shifting from 30-day to 45-day terms during slow months
Get it in writing
Once agreed, confirm the change by email or updated document. Avoid relying on memory or informal agreements.
Thank them and follow through
Express appreciation and meet the revised terms. Keep the relationship strong.
4. Expected Outcomes as Narrative
With John’s guidance, Sione prepared three requests. First, he spoke with his landlord and shared a summary of his cash flow position. He asked for a three-month rent reduction in exchange for a six-month lease extension. It was accepted.
Next, he contacted his bank and requested an interest-only period on his van loan. The bank agreed, based on his clean payment history and clarity of plan.
Lastly, he asked his largest supplier to shift from 30 to 45-day terms for the next two orders. They agreed to trial it.
Each small win eased pressure. More importantly, Sione kept his reputation intact. His business stayed stable and his partners respected how he handled the conversations.
5. Red Flags & Mitigating Strategies
Red Flag 1 - Waiting too long to renegotiate
Mitigation - Start the conversation when pressure starts, not when crisis hits
Red Flag 2 - Phrasing requests as complaints
Mitigation - Focus on shared outcomes and ongoing relationship
Red Flag 3 - Making promises you can’t keep
Mitigation - Be clear and honest - never agree to terms you can’t meet
6. HR Best Practice
Team members may not be directly involved in lease or loan discussions, but they often feel the tension when overheads are tight. Keep communication steady -
Let staff know when structural costs are being addressed
Reassure them that these changes are part of stabilising the business
Invite suggestions for operational savings that don't affect wages or jobs
Remind the team that managing fixed costs is part of protecting roles
As John often says, “When staff see that leadership is facing hard truths with calm and care, it builds trust that outlasts tough seasons.”
7. Psychological Perspective
Renegotiating feels uncomfortable for many business owners. It can stir feelings of failure, pride or fear of rejection. But most contract partners would rather adjust terms than lose a good customer.
Clarity and courage ease the discomfort. John recommends rehearsing the ask with someone you trust before making contact. The first conversation is the hardest - the rest tend to follow more easily.
8. Recommended Owner's Mindset
Enter these conversations with a mindset of constructive partnership. You are not begging, you are proposing changes that benefit both sides in the long run. See yourself as a responsible operator taking steps to keep your business viable and your relationships strong.
9. Reflective Questions for the Owner
Which current agreements are putting pressure on my cash flow?
Have I explained my position clearly and calmly to the other party?
What alternative terms could work better for both of us?
Am I approaching this conversation early enough?
Who can help me prepare for the discussion and review the outcome?
10. Suggested Ongoing Actions
Review all major contracts every six months — not just at renewal time
Track payment cycles and lease terms in a simple spreadsheet
Keep a contact log with key partners and suppliers
Document any negotiated changes in writing
Book a regular review with your advisor - John Luxton or your accountant, to check agreements against current conditions
Critical Takeaway - Negotiation isn’t weakness - it’s leadership in action when conditions change.
If you’d like a confidential, free of charge, free of obligation conversation about your business, here’s how to get me.
📞 Phone +64 275 665 682
✉️ Email john.luxton@regenerationhq.co.nz
🌐 Contact Form www.regenerationhq.co.nz/contact
If you’d like to read more RegenerationHQ thinking on SME business and other things, go here – www.regenerationhq.co.nz/articlesoverview
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Supporting NZ SME Owners to Exit Well, Lead Better and Build Business Value.