Best business debt consolidation loans of 2022
What is business debt consolidation?
Business debt consolidation differs from debt refinancing. When you refinance a loan, you replace one loan with a different loan, usually with a lower interest rate or more favorable terms. With debt consolidation, you replace several different loans with a single loan.
How to consolidate the debts of a company?
To consolidate your business debt, you’ll start by determining the total amount you owe on all the loans you want to consolidate.
Then you will use your debt consolidation loan to pay off your existing loans.
After that, you will only have to make payments on your debt consolidation loan instead of multiple debts.
Are Debt Consolidation Loans Worth It?
Business debt consolidation loans may be worth it if:
One or more of your existing loans has a high interest rate and you may qualify for a lower rate.
One or more of your existing loans has terms that you don’t like, such as frequent repayments or a short repayment term, and you may qualify for better terms.
You find it difficult to control your various debts and you would have an easier time with a single loan.
When shopping, note that you have many business loan options to consolidate your debts. Certain types of loans, such as SBA microloans, cannot be used to pay off existing debt. But many other business term loans can. Don’t limit your search to loans marked explicitly for debt consolidation.