How to Consolidate Business Debts with a Loan


A business debt consolidation loan is responsible for allowing each and every business owner to clear a number of small business loans with the help of a single consolidation loan. Business debt consolidation loans are responsible for helping you to refinance the existing debt amounts and also help in gathering all the loan payments into only one repayment schedule. Apart from consolidating the debt payments into a single one, a small business consolidation loan is also going to offer ideal terms, which include lower rates as well as less frequent payments. Business loan consolidation is capable of making repaying even more affordable as well as manageable.

Process of business debt consolidation loans

According to, business debt is definitely not a bad thing. You need to understand that debt, which is associated with your small business, is definitely an ideal way that helps in financing the growth of a business. Three-quarters of business funding is responsible for coming from business debt. However, there are times when you definitely require quick business loans. It is true that a quick business loan can definitely solve your requirements, but the rates of interest can be extremely expensive, especially if it is for a long term. There is a chance that your business has started to grow and is also becoming eligible for the low rate products and you might be wasting the cash flow to the various loan accounts. This is exactly where debt consolidation steps in.

Business debt consolidation loans are for the business owners who are constantly struggling with the multiple schedules of repayment or a number of business loans. Obtaining a single business debt consolidation loan is capable of converting all these multiple payments as well as accounts into only one loan product with one rate of interest and a particular payment schedule.

Instead of having to remember due dates of the loan payments separately and understanding whether you have enough money to repay your loan, it is a good idea to take control of the cash flow of your business by tracking a single and predictable payment, which debt consolidation allows.

Debt consolidation versus refinancing

A number of business owners prefer using refinancing and debt consolidation interchangeably. Although debt consolidation and refinancing have a number of similarities, you need to know that they are not the same. Refinancing is basically when a borrower is taking out new loans at low rates of interest for clearing loans of high rates. On the other hand, in case of debt consolidation, the borrower is responsible for taking out new loans in order to clear multiple loans.

Debt consolidation is definitely one form of refinancing but it is also true that all refinancing forms are not debt consolidation. If you are replacing one loan with another loan at low rates of interest, it is refinancing but definitely not debt consolidation. Debt consolidation is responsible for converting multiple loans into a single loan.

Apart from that, debt consolidation also does not result in a low rate of interest always. It is going to help in saving money but the main focus is making payments manageable by replacing a number of lenders with a single one. In this case, there is a high chance that you are going to get better interest rates. This is why it is imperative that you remain smart when borrowing money, work with reputable lenders, conduct the necessary research, and check the calculations more than once. You need to ensure that consolidating business debts is the right choice that you are making for your business.

Top options for consolidating your business loans

The ideal business consolidation loan, whether it is secured or unsecured or anything else, is basically a long term loan that helps in consolidating business debt. Given below are the best debt consolidation options that you have.

Traditional bank loan

Traditional bank loans are the best ways of consolidating business debt if you are able to qualify. Bank loans are known to have low rates of interest and the longest possible terms, and they are also going to lend huge amounts of capital. The term length is usually 10 years, the interest rate is under 10% and the payment frequency is monthly. National, as well as local community banks, can help you when it comes to debt consolidation. One thing that you need to know is that banks are responsible for approving only those borrowers who have the best qualifications. Therefore, if you have not been one year into your business, a good credit score, and ideal revenue streams, it is going to be difficult for you to qualify. You can visit to gain more knowledge about this.

SBA Loans

After traditional bank loans, other options that can be considered for consolidating business debt is SBA loans. These loans are government-guaranteed loans, which are responsible for making the loans affordable. Also, it is not extremely difficult to qualify for these kinds of loans. SBA loans, like the other bank loans, are known to have a long term as well as low rates of interest. You are also going to require good credit as well as proper business finances in order to qualify.

When you are applying for the business consolidation loans, you need to ensure that you are following the tips that have been listed below in order to optimize debt consolidation.

  • It is crucial that you identify the business debts that you have and consider the complete details associated with the debts.
  • Checking for prepayment penalties is also a must because prepayment penalties can be extremely expensive and it is crucial that you check this before you are consolidating your business debt.
  • Determine the total amount of debt that your business has to clear.
  • Have knowledge about the annual percentage rate of the existing loans.
  • Search for ideal business debt consolidation loans by visiting local banks, checking out lenders, and considering what you are going to qualify for.


Instead of having to pay money to multiple creditors at the end of every month, it is better to consolidate all the business loans into a single one. Consider everything that has been mentioned above and decide whether debt consolidation is a good option for you.

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