This study examined the relationship between business risk management, capital structure, and financial performance of small and medium enterprises (SMEs) in Nakaseke District, Uganda. Despite the acknowledged importance of SMEs in Uganda's economic development, high failure rates attributed to poor risk management practices and suboptimal capital structure decisions continue to constrain the sector's contribution to growth and employment. A cross-sectional survey of 175 SME owners and managers was conducted using structured questionnaires. Risk management was operationalized through risk identification (r = 0.487, p < 0.01), risk mitigation strategies (r = 0.523, p < 0.01), and risk monitoring (r = 0.461, p < 0.01); while capital structure was measured through debt-equity ratio management (r = 0.538, p < 0.01) and financing diversification (r = 0.501, p < 0.01). All variables demonstrated significant positive correlations with financial performance. Multiple regression revealed that debt-equity ratio management (β = 0.342, p < 0.001) and risk mitigation strategies (β = 0.298, p < 0.01) were the strongest predictors of financial performance. The combined model explained 58.7% of variance in SME financial performance (R² = 0.587). The study recommends enhanced risk management training for SME owners, improved access to diversified financing instruments, and development of SME-specific risk assessment frameworks adapted to rural business contexts.