Businesses that are highly leveraged with debt would either go bankrupt or raise prices to account for higher debt costs, which wouldn't address the problem.
That's their problem.
If your business can't handle a 1% a year rate hike, you have no business in business.
Sooner or later, they will turn into a zombie company and weigh on the economy anyway. So better purge them sooner than later so capital starts flowing to more healthy businesses and sectors.