Best Business Debt Consolidation Loans in 2024

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By Tara Mastroeni | Edited by Kurt Adams and Pearly Huang | Updated on July 19, 2024

Business debt consolidation lenders at a glance

Bluevine: Best business debt consolidation option for business lines of credit

Up to $250,000

7.80%

6 or 12 months

625

12 months

Pros
  • Accepts borrowers with fair credit
  • Provides flexible funding
  • Offers a lower minimum interest rate
Cons
  • Has shorter repayment terms
  • Has high minimum monthly revenue requirement
  • Has a higher annual revenue requirement

Why we picked it

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If you need flexible funding in addition to funds for debt consolidation, a business line of credit may be a better choice than a term loan since it allows you to borrow against it as needed. In particular, we chose Bluevine as our best line of credit pick because it accepts borrowers with fair credit scores and boasts a low minimum interest rate. That said, your business will need to be bringing in at least $10,000 in monthly revenue to qualify and you’ll be subject to relatively short repayment terms.

Fora Financial: Best business debt consolidation option for borrowers with bad credit

$5,000 - $1,500,000

1.15

4 to 18 months

570

6 months

Pros
  • Accepts borrowers with poor credit
  • Has a short time in business requirement
  • Offers large loan amounts
Cons
  • Only shares factor rate information
  • Has a higher minimum annual revenue requirement
  • Charges an origination fee

Why we picked it

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Fora Financial is our top pick for borrowers with bad credit because the lender accepts credit scores as low as 570. In addition, you’ll have the opportunity to be approved for up to $1,500,000 in funds and you’ll only need to be able to show a minimum of six months in business in order to qualify for a loan. Still, Fora Financial’s annual revenue requirement is fairly steep at $15,000 per month and the company does charge a 3.00% origination fee.

Funding Circle: Best business debt consolidation option for low-revenue businesses

$25,000 - $500,000

15.22%

6 to 84 months

660

24 months

Pros
  • Has a low annual revenue requirement
  • Offers longer loan terms
  • Provides an account manager to help with the application process
Cons
  • Has a higher minimum credit score requirement
  • Has a higher maximum interest rate
  • Has a longer time in business requirement

Why we picked it

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Funding Circle is our choice for the best lender for low-revenue businesses because its annual revenue requirement is only $50,000, which is much lower than some of its competitors. Plus, its loan terms range up to seven years, which makes it a solid option for a long-term business loan. However, since its minimum credit score requirement is 660, you could have trouble being approved with poor credit. You’ll also likely pay more for the privilege of borrowing with a lower score since its interest rates extend to 45.00%.

OnDeck: Best business debt consolidation option for fast funding

$5,000 - $250,000

27.30%*

Up to 24 months

625

12 months

Pros
  • Offers a low minimum borrowing amount
  • Advertises same-day funding
  • Has a shorter time in business requirement
Cons
  • Doesn’t disclose starting interest rate
  • Requires daily or weekly repayment schedule
  • Offers shorter loan terms

Why we picked it

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OnDeck is the standout choice for those looking for fast funding because you may be able to receive your financing the very same day your application is approved. Its shorter time in business requirement and lower minimum loan amount of just $5,000 may also be of benefit. Yet, since OnDeck only offers a short-term business loan, you’ll have to deal with some limitations. For one, repayment terms only go up to 24 months. For another, you’ll have to plan for daily or weekly payments.

SBA 7(a) Loan: Best business debt consolidation option for large loan amounts

Up to $5,000,000

Base plus 3.00%

Up to 120 months

No minimum (680 recommended)

24 months

Pros
  • Offers larger loan amounts
  • No minimum credit score requirement
  • Provides longer loan terms
Cons
  • Imposes a longer time in business requirement
  • Loans over $350,000 may require collateral
  • Funding may take longer

Why we picked it

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The U.S. Small Business Administration (SBA) is our top choice for borrowers seeking to consolidate larger loan amounts. Since the SBA guarantees these loans, lenders are able to offer more generous loan terms, such as larger loan amounts and longer repayment periods. At the same time, though, funding times can be much longer with these loans and for loans $50,000 or higher, you’ll have to put up collateral to secure the financing.

BHG Financial: Best business debt consolidation option for longer loan terms

$20,000 - $500,000

8.49%

Up to 144 months

750

24 months

Pros
  • Longer loan terms available
  • Larger loan amounts available
  • No personal collateral requirement
Cons
  • Not upfront about their qualifying requirements online
  • Higher annual revenue requirement

Why we picked it

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BHG Financial’s business debt consolidation loan terms extend up to 144 months, which is why it’s our best choice for borrowers who need more time to pay off their loans. Combined with its larger loan amounts and lack of a personal collateral requirement, this lender is set to be a solid pick for those who can qualify for its loans. However, you may have a hard time figuring out if you can qualify in the first place. BHG Financial doesn’t publish all of its qualifying requirements online and some of them, like its $1 million annual revenue requirement, may be hard for some small business owners to meet.

What is a business debt consolidation loan?

A business debt consolidation loan replaces all your existing debt into one loan with one monthly payment.

Consolidating business debt could help your business save money and free up cash flow. You could potentially lower your interest rate or get more manageable payments.

Types of business debt consolidation financing

Here’s a few ways you can consolidate your business debt:

  • Business debt consolidation loans: Business debt consolidation most traditionally comes in the form of a small business term loan. These loans can come from traditional financial institutions, like banks and credit unions, or online lenders. Each of these providers may offer a loan specific to debt consolidation or a small business loan that can be used for a variety of purposes, including consolidating debt.
  • Balance transfer business credit cards: Business balance transfer credit cards allow you to consolidate business debt from multiple credit cards in one place. Most also come with an introductory 0% APR period, which can help you save money on interest charges while you pay down your balance.

Business debt consolidation vs. refinancing a business loan

It’s important to note that business debt consolidation is different from refinancing business debt. Refinancing allows you to replace an existing loan with a new one that has better terms, but it doesn’t give you the opportunity to combine multiple sources of debt into one.

How to consolidate business debt

To consolidate business debt, you would take out a new business loan and pay off your existing debts. This could include business credit card debt as well as debt from a business term loan. You’ll be left with one loan with one monthly payment, ideally with more favorable terms than the original ones. Here’s how it works:

1. Find out how much debt you have

Before you can consolidate business debt, you need to determine how much you owe. Start by gathering a list of any existing debt obligations for your business. Be sure to include the total outstanding balance, repayment terms, interest rate and any prepayment penalties.

Review this information to determine which debts are good candidates for debt consolidation. Then, add up those balances to determine the total amount that you want to consolidate. Once you have this information in hand, you’ll have a better idea of how much you need to borrow.

2. Determine your eligibility

Each lender will set their own business loan requirements, most of which can typically be found on their websites. However, in general, the following metrics will play a role in loan eligibility: credit score, time in business, annual revenue, and any collateral or personal guarantee.

Often, your business and personal credit score will have the biggest impact since it plays a role in both your loan eligibility and the interest rate you’re given. Some lenders on this list will accept scores as low as 500, but in general, the most affordable rates are given to the borrowers with the highest credit scores.

 If you want a better idea of how much you could be approved for in a loan, use our business loan calculator to get started.

3. Gather your supporting documentation

Next, your lender will likely want to see some supporting documentation along with your loan application. Here’s an overview of what you may need to provide:

  • Business plan: Your business plan gives the lender more information about your unique business model.
  • Business licenses: Providing copies of your business licenses shows that you’re compliant with local government regulations.
  • Tax returns: Showing your personal and business tax returns will give the lender a better sense of your net profit.
  • Financial statements: Recent financial statements can help give the lender a better picture of your business’s overall financial health.
  • Governing documents: Your governing documents, such as articles of incorporation or bylaws, will give the lender a sense of how your business is run.

4. Compare loan options

After you’ve gathered all your information, the next step is to shop around for a loan. (More on that below.) Shopping around can help you save money on interest charges and help ensure that you select the best loan terms for you.

As a rule of thumb, you’ll want to gather offers from a handful of lenders before making your final decision. Be sure to provide each lender with the same information so that you can make an apples-to-apples comparison once you have the offers in hand.

5. Apply for a loan

Once you’ve landed on the loan offer that works best for you, it’s time to officially apply for the loan. Online lenders will usually allow you to apply via a simple online application form. However, more traditional financial institutions, like banks or credit unions, may require you to visit a branch in person.

Some lenders may offer access to an account representative who can help you pull your loan application together. But, if your lender doesn’t, consider bringing your application to your local Small Business Development Center (SBDC) for assistance.

6. Close on the loan

As soon as your application has been approved, you’ll receive a copy of your loan agreement. Be sure to read over this document carefully so that you understand all the terms and conditions clearly before signing on the dotted line.

Don’t be afraid to reach out to your lender if you have questions about any loan terms.

How to compare business debt consolidation loans

While you’re shopping around for the best loan to consolidate your business debt, here are a few key metrics to keep in mind:

  • Interest rate or factor rate: Some lenders may charge a simple interest rate while others use a factor rate. In either case, you’ll want to compare how much you’ll pay in interest charges over the life of the loan.
  • Fees: On a term loan, some lenders may charge an origination fee. In contrast, with a business line of credit, you may face a draw fee or monthly maintenance fee. Compare fees to make sure you’re getting the biggest bang for your buck.
  • Loan terms: Longer loan terms typically mean lower monthly payments, but you’ll likely pay more in total interest charges. Shorter loan terms, on the other hand, can help you save on interest, but your monthly payment will probably be higher. As a general rule, it makes sense to pick the shortest loan term where you can comfortably afford the monthly payment.
  • Funding time: Some lenders offer quick business loans and can have the funds in your account as soon as the same business day. Others may take a few days after your application has been accepted to release the funds. Decide how soon you need the funds before making your decision.
  • Collateral or personal guarantee: Some loans are secured by an asset, which can help you secure a better interest rate. But, it also puts the asset at risk of being repossessed if you default on the loan. Be sure to weigh whether that risk is worth it when comparing lenders.

Pros and cons of business debt consolidation loans

ProsCons

 Consolidation streamlines multiple debt payments into one.

 Your new loan may come with a better business loan interest rate or loan terms.

 Keeping up with your payments can help improve your credit score.

 Consolidating won’t erase your debts.

 Taking out a new loan can temporarily ding your credit score.

 Opening up a new loan may come with additional upfront fees.

How we chose the best business debt consolidation loans

We reviewed more than 15 lenders to determine the overall best six loans to consolidate business debt. To make our list, lenders must meet the following criteria:

  • Minimum time in business of 6 months: Most lenders require at least 24 months in business before granting loan approval, but some of our lenders have time in business requirements as short as just six months.
  • Minimum credit score of 500: If you’re looking for a bad credit business loan, some of our lenders accept personal credit scores as low as 500.
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

Best business debt consolidation loans summary

Frequently asked questions

Yes, it’s possible to consolidate your business debt using a business debt consolidation loan or balance transfer credit card. Many small business loans can be used for debt consolidation purposes, but some lenders don’t allow it. With that in mind, you’ll want to be sure to check in with your preferred lender about any use restrictions before you apply.

There’s no one-size-fits-all answer to whether business debt consolidation makes sense. In general, if you’re hoping to streamline your finances and you can find a loan with decent terms, it may make sense to consolidate business debt. However, consolidation doesn’t erase what you owe – it just allows you to restructure your debt into a more manageable payment. If you are close to paying off your existing debts or you can’t find a loan with favorable terms, consolidating may not be the best idea.

Any time you open or close a loan or credit card, it can temporarily ding your credit score. That said, the good news is that, as long as you continually make your payments on time, taking out a consolidation loan can actually help you build your credit score over time.