This study investigated the relationship between business risk management, capital structure, and the financial performance of small and medium enterprises (SMEs) in Nakaseke District, Uganda. Guided by a descriptive correlational research design, the study drew a sample of 148 SME owners and managers from a target population of 412 registered enterprises. Data were collected using structured questionnaires and key informant interviews with financial institution representatives. The study found that risk management practices encompassing risk identification, assessment, mitigation, and monitoring had a significant positive effect on the financial performance of SMEs. Capital structure decisions, particularly the ratio of debt to equity financing, also significantly influenced profitability, liquidity, and business growth. SMEs that maintained a balanced capital structure and adopted proactive risk management strategies consistently reported superior financial performance compared to those that did not. The study recommended that SME operators enhance their risk literacy, seek formal business advisory services, and develop structured capital management plans to improve financial sustainability.