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Kristy Snyder
Kristy Snyder
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Kristy is a freelance contributor to Newsweek’s personal finance team. As an editor, Kristy has worked with sites like Bankrate, JPMorgan Chase and NextAdvisor to craft and hone content on banking, credit cards and loans. She’s also written for publications such as Forbes Advisor and U.S. News and World. In her spare time, Kristy loves traveling, hitting up rail trails and reading.
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Robert Thorpe
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Robert is a senior editor at Newsweek, specializing in a range of personal finance topics, including credit cards, loans and banking. Prior to Newsweek, he worked at Bankrate as the lead editor for small business loans and as a credit cards writer and editor. He has also written and edited for CreditCards.com, The Points Guy and The Motley Fool Ascent.
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The Best Debt Business Consolidation Loans Make Repayment Easier.
It’s easy for a small business to get into multiple forms of debt. Maybe you took out a loan to get your business up and running, opened a business credit card to help you stock up on inventory and opened up a line of credit to help you buy new equipment. Being in debt to multiple lenders at once can be confusing and complicated, especially when dealing with varying business loan interest rates and fluctuating payments.
For many business owners, it’s easier to consolidate all debts into one easy-to-pay loan with a fixed annual percentage rate (APR). A business debt consolidation loan means you’ll only be paying one lender, which reduces confusion and makes it easier to see your business’s true financial health. And if you’re able to secure a lower interest rate than you were previously paying, you can save money over the life of the loan.
We’ve put together a list of the best debt business consolidation loans so you can browse your options and find one that meets your needs.
Our Methodology
Our research is designed to provide you with a comprehensive understanding of personal finance services and products that best suit your needs. To help you in the decision-making process, our expert contributors compare common preferences and potential pain points, such as affordability, accessibility, and credibility.
Our Picks for the Best Business Debt Consolidation Loans of 2024
- Best for Large Loans: SBA 7(a) Loan
- Best for Established Businesses: Funding Circle
- Best for Adding on Funds: Fora Financial
- Best Business Line of Credit: Bluevine
- Best for Same-Day Funding: OnDeck
- Best for Minority- and Women-Owned Businesses: Accion Opportunity Fund
- Best for Startups: Fundbox
- Best for Industry-Specific Loans: National Funding
- Best for Long Loan Terms: BHG Money
- Best for No Collateral: TAB Bank
Compare Personal Loans
Best Business Debt Consolidation Loans of 2024
Best for Large Loans
Loan amount
Up to $5,000,000
Minimum credit score
155 FICO Small Business Scoring Service
Repayment schedule
Up to 25 years
Funding speed
30 to 90 days
Why We Chose It
A Small Business Association (SBA) 7(a) loan offers the largest loan amounts as well as gracious repayment terms up to 25 years. Plus, since multiple lenders offer SBA loans, you can shop around and choose the institution you’d most like to partner with.
Pros
- High loan amounts
- Long repayment terms
- Relatively low APRs
Cons
- Prepayment fees in certain circ*mstances
- Slow funding speed
- Confusing eligibility requirements and fee schedule
Additional Information
Fees:
Prepayment fee (if you pay more than 25% of the outstanding loan balance and your loan term is 15 years or longer):
- During first year: 5% of prepayment amount
- During second year: 3% of prepayment amount
- During third year: 1% of prepayment amount
The following allowable fees vary by lender:
- Service and packaging fees—up to $2,500 flat fee or 3%-5% fee (up to $30,000 max)
- Extraordinary servicing fee—up to 2% of the loan amount per year
- Filing or recording fees
- Late payment fees—no more than 5% of the loan payment
- Legal services
APR:
Max fixed APRs based on an 8.50% prime rate:
- $25,000 or less: 16.50%
- $25,001 to $50,000: 15.50%
- $50,001 to $250,000: 14.50%
- $250,001+: 13.50%
Loan availability:
Available to small businesses that:
- Operate for-profit in the U.S.
- Meet size and type requirements
- Can’t get credit on reasonable terms from non-federal, non-state, and non-local government sources
- Are creditworthy and have the ability to repay the loan
Best for Established Businesses
Loan amount
$25,000 to $500,000
Minimum credit score
660 FICO score
Repayment schedule
6 months to 7 years
Funding speed
Two days
Why We Chose It
As long as your business has been around for at least two years, Funding Circle offers a variety of terms. You can pay off your loan early without penalty and you’re assigned a dedicated account manager to guide you through the loan process. Funding Circle also offers SBA 7(a) loans.
Pros
- No prepayment penalties
- Quick approval and funding
- No application fee
Cons
- Potentially high interest rates
- May require collateral
- Limited to businesses over two years old
- Businesses in certain industries can’t get a loan
Additional Information
Fees:
- Origination fee: 4.49% to 10.49%
- Late payment fee: 5% of missed payment
APR:
Not disclosed
Loan availability:
Available to small businesses that:
- Have two years in business
- Have no personal bankruptcies within the past seven years
- Do not operate in speculative real estate, nonprofit organizations, weapons manufacturing, gambling, marijuana or p*rnography
Best for Adding on Funds
Loan amount
$5,000 to $1,500,000
Minimum credit score
500
Repayment schedule
Four to 15 months
Funding speed
24 to 72 hours
Why We Chose It
Fora Financial has a low credit score requirement to help business owners with bad credit. It offers some of the largest loan amounts around to qualified business owners. And after you pay off at least 60% of your loan, it lets you add on more funding to your loan, which can be easier than applying for an entirely new loan. You can also get prepayment discounts.
Pros
- Can increase loan amount after you pay down 60%
- Prepayment discounts
- Low credit score requirement
Cons
- Sales requirements might be hard to meet
- Short repayment period
- Makes it difficult for business owners to compare rates with other lenders
Additional Information
Fees:
- Processing fee: Starts at 2.5%
- Wire transfer fee
Rates:
15 to 40 cents on the dollar
Loan availability:
Available to small businesses that:
- Have six months in business
- Make $15,000 a month in gross sales
Can receive 75% to 125% of your monthly gross sales
Best Business Line of Credit
Loan amount
$6,000 to $250,000
Minimum credit score
625 FICO score
APR
Not disclosed
Funding speed
24 hours
Why We Chose It
Bluevine business lines of credit come with minimal fees and the chance at fast funding. This online bank is also known for its business checking account, which earns a generous APY. Read our Bluevine review.
Pros
- Revolving credit replenishes as you make repayments
- No prepayment or account opening fees
- Fast funding
Cons
- Short repayment terms
- Tough eligibility requirements
- Does not list APR range
Additional Information
Fees:
- Bank wire fee: $15
- Late fee: 5% ($35 minimum)
Repayment schedule:
- Weekly installments over 26 weeks
- Monthly installments over 12 months
Loan availability:
Available to small businesses that:
- Have 24+ months in business
- Make $40,000 in monthly revenue
- Have had no bankruptcies in the past three years
Not available to certain industries, including financial or auto dealership businesses. Also not available in Nevada, North Dakota, South Dakota and U.S. territories.
Best for Same-Day Funding
Loan amount
$5,000 to $250,000
Minimum credit score
625 FICO score
APR
60.9%
Funding speed
Same day
Why We Chose It
OnDeck can get you same-day funding up to $100,000 of funding if you apply by 10:30 a.m. ET. You’ll get your money before 5 p.m., making it a great choice if you have loans you need to pay off before the end of the day.
Pros
- Prepaying loan early waives remaining interest
- Can apply for more funding after six months or 40% repayment
- Applying for more funding can reduce origination fee
Cons
- High APR
- High revenue requirements
- Not available in North Dakota
Additional Information
Fees:
Origination fee: 0% to 4%
Repayment schedule:
- Daily, weekly or monthly payments
- 18- to 24-month terms
Loan availability:
Available to small businesses that:
- Have one year in business
- Have $100,000 in annual revenue
- Have a business checking account
Not available in North Dakota.
Best for Minority- and Women-Owned Businesses
Loan amount
$5,000 to $250,000
Minimum credit score
550
APR
Starts at 8.49%
Funding speed
A few weeks
Why We Chose It
The Accion Opportunity Fund’s customer base is 90% women, people of color and business owners with low-to-moderate income. APRs are also relatively low and repayment terms are more flexible compared to other lenders. Read our Accion Opportunity Fund business loans review
Pros
- Support in both English and Spanish
- Loans available to business owners with ITIN
- Educational resources and coaching available
Cons
- Loans not available in five states
- Takes a while to get funding
- Not transparent about maximum APR
Additional Information
Fees:
Origination fee: (starts at 3.99%)
Repayment schedule:
12, 24, 36 or 60 months
Loan availability:
Available to small businesses that:
- Have been in business for 12 months
- Generate $50,000 in annual sales
- Have a 20% ownership stake
- Have an owner 18 years or older
Loans not available in Montana, North Dakota, South Dakota, Tennessee, Vermont or Washington, D.C.
Best for Startups
Loan amount
Up to $150,000
Minimum credit score
600 FICO score
APR
4.66% to 8.99%
Funding speed
Next business day
Why We Chose It
Fundbox is a business line of credit, and every time you draw funds, you get to choose the repayment terms for that batch of money. You can also use the Flex Pay feature to pay off your debts directly from Fundbox, eliminating the need to withdraw money and send in your payment on your own.
Pros
- No prepayment penalty
- Low credit score requirement
- Next-day funding
Cons
- No long-term repayment options
- Can only increase credit limit $500 at a time
- Repayments are debited automatically whether or not you have the funds to pay
Additional Information
Fees:
- Late payment fee: Average of the original fees of the repayment plan
- Non-sufficient funds fee: $6
- Credit card processing fee
Repayment schedule:
- Variable weekly repayments for standard draws
- 12- or 24-week repayments for Flex Pay draws
Loan availability:
Available to small businesses that:
- Are based in the U.S.
- Have $100,000 in annual revenue
- Have been in business six months
- Have a business checking account
Best for Industry-Specific Loans
Loan amount
$5,000 to $500,000
Minimum credit score
600
Factor Rate
1.11
Funding speed
24 hours
Why We Chose It
National Funding offers both short-term business loans and working capital loans for a wide variety of industries, including agriculture, beauty and wellness, commercial trucking and more. When you work with a lender that specializes in your industry, you may have an easier time getting approved for the exact amount of funding you need to consolidate your debt.
Pros
- 24-hour funding
- Early payoff discounts
- 16 industry specialties
Cons
- Some loans require daily repayment
- High annual revenue requirement
- Origination fee
Additional Information
Fees:
Origination fee: 1% to 2%
Repayment schedule:
- Daily or weekly payments
- 4-month to 24-month terms
Loan availability:
Available to small businesses that:
- Have been in business for six months
- Have $250,000 in annual sales
Best for Long Loan Terms
Loan amount
$20,000 to $500,000
Average credit score
731
APR
Not disclosed
Funding speed
3 days
Why We Chose It
If you know you’ll need some time to pay off your debt, BHG Money gives you up to 12 years to repay your loan. It also doesn’t have strict loan requirements regarding how long you’ve been in business or how much money you make, opening up funding to more applicants.
Pros
- No business revenue requirements
- No business age requirement
- U.S.-based concierge service
Cons
- Average BHG business loan customer has a 731 FICO score and average time in business of 20 years
- Loan is secured with business lien
- Not transparent about APRs or fees
Additional Information
Fees:
Closing fee: 1% to 3%
Repayment schedule:
Up to 12 years
Loan availability:
- No business revenue or age requirements
- BHG considers your income and credit
Best for No Collateral
Loan amount
$30,000 to $300,000
Minimum credit score
Not disclosed
APR
Not disclosed
Funding speed
Not disclosed
Why We Chose It
If you don’t want to put your personal or business assets up for collateral, TAB Bank lets you take out a loan without a guarantee. You can also prequalify online to see how much funding you can receive.
Pros
- Don’t need collateral to get loan
- Potentially low APR
- Flexible loan terms
Cons
- Not transparent about APR or fees
- Unknown eligibility requirements
- Not clear on how fast funding can happen
Additional Information
Fees:
Unknown
Repayment schedule:
Not disclosed
Loan availability:
Eligibility varies based on:
- Purpose of the loan
- Length of the term
- Forecasted and actual financial health of your business
- Company credit score
- Any collateral used
What Is a Business Debt Consolidation Loan?
A business debt consolidation lets you consolidate all of your business debts into one easy-to-manage payment. Getting a business debt consolidation loan can help you get a lower APR so you’re not paying so much in interest. It can also help you keep better track of your finances so you don’t forget to make a payment.
With this type of loan, you can consolidate business credit card debt, business loans, lines of credit, equipment loans and any other type of business-related debt you might have. If you qualify, the lender gives you enough money to pay off these individual loans so you’ll only be on the hook for one larger loan. This type of loan may be secured or unsecured, depending on the lender’s requirements and the financial situation of the business.
Lenders often have certain eligibility requirements for taking out a business debt consolidation loan. For example, they may require your business to have a certain annual revenue. Or, they may only work with businesses that have been around for a certain amount of time. These are signs your business is more reliable and will be able to repay the loan.
How Do Debt Consolidation Loans Work? What Types Of Loans Are There?
To get a debt consolidation loan, you’ll apply through a lender, like a bank, credit union or online platform. The terms of the consolidation loan, including the interest rate, repayment period and loan amount, are determined based on your business’s creditworthiness and financial history and the lender’s policies. In most cases with a debt consolidation loan, you’ll receive your funding in one lump sum payment. It’s then up to you to disperse your funds to pay off your various individual debts. Once you settle these debts, you’ll now only have your consolidation loan to pay off.
Business debt consolidation loans come in a few different forms. The most popular kind are traditional term loans. This is when you receive your money all at once and have a fixed amount of time to pay it off with regular, unchanging payments. You might also consider an SBA loan. These are guaranteed by the U.S. Small Business Administration and usually come with lower interest rates and more flexible repayment terms.
Another option for consolidating your business debt is a business line of credit. Rather than receive a lump sum, you’ll instead have the option to borrow money as needed up to a certain amount. This lets you withdraw funds as needed, and you only pay for the amount you withdraw. You might even be able to get a secured business loan by putting your equipment or other assets up as collateral to guarantee the loan in case you don’t pay it back.
Why Would You Need a Business Debt Consolidation Loan?
For many businesses, debt consolidation loans can be an extremely useful resource. Consolidating your debt has numerous advantages that can help your business get out of a hole. Here’s a closer look at some of the top reasons you might want to consider a consolidation loan:
- Simplify financial management: Paying off debts to multiple lenders and vendors can be a headache. If you miss one of those payments, it could put your business in real trouble. Consolidating your debts makes it easier to keep track of where your money is going.
- Lower interest rates: Certain online lenders can charge outrageous loan APRs in excess of 99%. It’s also not uncommon for business credit cards to have APRs over 28%. The best business debt consolidation loans give you a chance to refinance your debt at a lower interest rate.
- Extend repayment terms: If you took out a short-term business loan that you don’t think you’ll be able to pay off, you may be able to roll that debt into a longer term with a consolidation loan. When your loan term is longer, your monthly payments are lower, making it easier to manage your finances.
- Preserve credit score: When your business doesn’t make on-time payments, it lowers your business credit score. Consolidating your debt can keep your payments on time, reducing damage to your business’s score.
- Prevent bankruptcy: If you’re on the brink of complete financial collapse, a debt consolidation loan can give you more time to figure out how to handle the situation. It’s not a long-term solution, but more like a bandage that can give you time to heal your financial wounds.
How to Choose the Best Business Debt Consolidation Loan for Your Business
Finding the best business debt consolidation loan takes a fair amount of consideration. Think about the following factors before nailing down a lender.
Maximum Loan Amount
Does the lender offer loan amounts that will meet your needs? For example, if a lender provides a maximum loan of $200,000 but you need at least a $300,000 loan, you’ll need to look elsewhere. Also consider whether or not the lender allows you to add on more funding when you’ve reached a certain repayment threshold. This might be helpful if you expect you’ll rack up more debts in the future.
APR
APR can greatly affect your overall loan cost. As an example, let’s calculate the loan interest on a $100,000 loan taken out for a two-year term. With a 15% APR, you’d pay a total of $16,367.96 in interest. But with a 30% APR loan, that amount skyrockets to $34,190.77. The lower the APR you can secure, the better. To improve your chances of getting a low APR, try to improve your business credit score.
Some debt consolidation lenders complicate matters by charging factor rates instead of APR. Factor rates can be found with some short-term loans open to startups and business owners with bad credit. Before taking out a loan that uses factor rates, make sure you convert it to an estimated APR so you can compare costs with other business debt consolidation loans.
Additional Fees
Taking out a loan isn’t free. Lenders often charge numerous fees to give you money. One common fee is an origination fee, which is what your lender charges to process your application. There are also usually late payment fees if you don’t make a payment on time and prepayment penalties if you pay off your loan ahead of time. See what these fees will be before signing your paperwork, as they can add on hidden costs you weren’t expecting to deal with.
Loan Terms
Longer terms may sound appealing because they come with lower monthly payments. But they also cost a lot more in overall interest. Shorter loan terms typically have better APRs and can be motivation to get your business out of debt faster. Also check how often your payments are due. Most lenders require monthly payments, but some lenders may require weekly or even daily repayments.
Eligibility Requirements
Lenders typically have strict requirements about what types of businesses they’ll loan to. Often, they want your company to have been in business for at least two years. They may also have income requirements. Review these criteria ahead of time so you know whether or not you’ll be approved.
Alternatives to Business Debt Consolidation Loans
Business loans are a different world than personal loans and other forms of debt. Here’s a look at how business debt consolidation loans compare to consumer debt consolidation options.
Business Debt Consolidation Loans vs. Personal Debt Consolidation Loans
Like business consolidation loans, personal debt consolidation loans are meant to help pay off debt—just for individuals instead. Both business debt consolidation loans and personal loans can use the borrower’s personal credit score to determine eligibility. But business debt consolidation loans may also look at business credit scores.
Loan repayment terms for personal debt consolidation loans can range from 24 to 60 months. Business debt consolidation loans can vary and be shorter or longer.
Business Debt Consolidation Loans vs. Consumer Credit Cards
If you have relatively good credit and don’t want the burden of taking out a large loan, a consumer credit card might be another way to tackle your debt. These rely on your personal credit score for approval, which can be good if you don’t have an extensive business history or a high annual revenue. Also, they can have higher credit limits than business credit cards.
There are many 0% APR and low interest credit cards that give you an introductory period to make purchases without paying interest. While many consumer cards offer interest-free repayment periods for 15 months or longer, most business credit cards only have intro APR offers for 12 months or less.
You might also consider balance transfer credit cards that let you consolidate your credit card debt on one card with a low introductory APR. These types of cards often require good-to-excellent credit, so they may be harder to be approved for than a business loan.
Business Debt Consolidation Loans vs. Home Equity
If you own a home, you can take out a loan by tapping into the equity you’ve built up in it. Individuals typically have options available in the form of a home equity loan or home equity line of credit (HELOC). A home equity loan is a lump sum you repay over a fixed term, while a HELOC is a line of credit you can draw from as needed for a set term, after which repayment begins.
Both typically allow you to borrow up to 80% of your home’s value and require you to have paid off at least 15% to 20% of your home’s value, though this depends on the lender’s policies.
Frequently Asked Questions
What Credit Score Is Needed for a Debt Consolidation Loan?
Most business loans require a credit score between 580 and 680. But some lenders like Fora Financial go as low as 500. Lenders also look at more than just your credit score. Most want to see a minimum time in business of one to two years and annual revenue, often $100,000 or more.
Why Is It So Hard to Get a Debt Consolidation Loan?
Lenders make it hard to get a debt consolidation loan because they want to make sure you can pay the loan back. If you have a low or no credit score, a history of missed payments, a lack of business assets or poor revenue, a lender will be more likely to deny your application. Before applying for a loan, do everything you can to improve your business’s financial health to increase your odds of securing good terms.
How Do I Get Rid of Business Credit Card Debt?
Consolidating your credit card debt is a great way to get started. You might also consider opening up a business credit card with a 0% introductory APR offer for balance transfers. These let you consolidate all of your business credit card debt on one card with no interest payments for a certain number of months. If the introductory period is long enough, you may be able to pay off all of your debt before the regular APR kicks in.
Related Articles
- Best Business Checking Accounts
- Best Business Credit Cards
- Business Credit Cards for Bad Credit
- Best Online Business Loans
- Business Credit Cards for Startups
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
Kristy Snyder
Contributor
Kristy is a freelance contributor to Newsweek’s personal finance team. As an editor, Kristy has worked with sites like Bankrate, JPMorgan Chase and NextAdvisor to craft and hone content on banking, credit cards and loans. She’s also written for publications such as Forbes Advisor and U.S. News and World. In her spare time, Kristy loves traveling, hitting up rail trails and reading.
Read more articles by Kristy Snyder
