Best Business Debt Consolidation Loans
Business debt consolidation may be a good idea if the new loan offers lower interest rates, longer repayment terms or a lower monthly payment than your current loans.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Updated · 4 min read
Written by
Senior Writer & Content Strategist 
Edited by
Managing Editor 
Co-written by
Lead Writer 
Concerned about tariffs?
Many small-business owners are under increased economic stress and uncertainty following the latest tariff announcements. NerdWallet is here to help you find answers for whatever you're looking for. Here are some resources to help you get started:
- Need emergency funding? Consider a business line of credit.
- Looking for fast access to working capital? Discover the best working capital loans.
- Want tips on how to mitigate the impact of tariffs? Read our guide.
Managing multiple small-business loans can be stressful. A business debt consolidation loan can simplify payments and potentially save you money.
What is a business debt consolidation loan?
A business debt consolidation loan allows you to pay off existing loans and other debts with one new loan. Instead of multiple payments to different lenders, you make a single loan payment each month.
Ideally, your new small-business loan will offer a lower interest rate or lower monthly payment than your current loans do. Lowering your interest rate can potentially save you money, depending on how long it takes you to pay off your loan. Similarly, reducing your monthly payment can free up cash, giving you more money to spend on other business needs.
To qualify for a business debt consolidation loan, you’ll likely need to have good credit and healthy business finances.
Business debt consolidation vs. debt refinancing
Business debt consolidation loans are different from debt refinancing — although the two are sometimes confused. Typically, the goal of refinancing a business loan is to get a new loan with more favorable terms to pay off an existing loan. Debt consolidation loans combine multiple debts into one loan.
Types of business debt consolidation loans
You can use several types of business loans for debt consolidation. Here are a few options:
- Bank business loans typically offer the best rates and terms, but can be slow to fund and difficult to qualify for. They often require several years in business and excellent credit. A secured business loan may be easier to access because secured loans are backed by assets you use as collateral. This means that if you fail to repay the loan, the lender may repossess those assets to cover its losses.
- SBA loans are a great alternative to bank loans, offering competitive interest rates and long repayment terms. The 7(a) loan program is the SBA’s primary business loan program and can be used to refinance current business debt. Because these loans are partially guaranteed by the U.S. Small Business Administration, it can be slightly easier to qualify compared with bank loans. But, SBA lenders still usually require good credit and multiple years in business. And, like bank loans, SBA loans can be slow to fund.
- Online business loans may be a good option for newer businesses or those with fair or bad credit. Although they typically have flexible qualification requirements, expect higher interest rates and shorter repayment terms. These loans tend to fund much more quickly than bank and SBA loans.
- Nonprofit loans are designed to benefit low-income and underserved communities. They can be a good option for women, minority and veteran business owners. These organizations may provide a range of loan options and how the funds can be used varies by lender. Nonprofits also typically offer business training, coaching and other support services.
How much do you need?
We'll start with a brief questionnaire to better understand the unique
needs of your business.
Once we uncover your personalized matches, our team will consult you
on the process moving forward.
Find the right loan for your business
Tell us how much you need and see your options in minutes.Best business debt consolidation loan options
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
80+ years of combined experience covering small business and personal finance.
50+ categories of the best business loan selections.
Objective and comprehensive business loans ratings rubric. (Learn more about our star ratings.)
NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
| Product | Max loan amount | Min. credit score | |
|---|---|---|---|
 SBA 7(a) loan with Fundera by NerdWallet | $5,000,000 | 650 | with Fundera by NerdWallet |
 Fora Financial - Online term loan Nerdwallet Rating with Fundera by NerdWallet | $1,500,000 | 570 | with Fundera by NerdWallet |
 Bluevine - Line of credit Nerdwallet Rating with Fundera by NerdWallet | $200,000 | 625 | with Fundera by NerdWallet |
 Accion Opportunity Fund Small Business Working Capital Loan Nerdwallet Rating with Fundera by NerdWallet | $250,000 | 620 | with Fundera by NerdWallet |
 OnDeck - Online term loan Nerdwallet Rating with Fundera by NerdWallet | $400,000 | 625 | with Fundera by NerdWallet |
 iBusiness Funding - Online term loan Nerdwallet Rating with Fundera by NerdWallet | $500,000 | 660 | with Fundera by NerdWallet |
 Bank of America Business Advantage Secured Term Loan Nerdwallet Rating with Fundera by NerdWallet | $250,000 | 700 | with Fundera by NerdWallet |
Pros and cons of business debt consolidation loans
Pros
Instead of having to make multiple daily, weekly or monthly payments, a single loan can improve cash flow by requiring only one regularly scheduled payment.
Can result in a lower monthly payment due to a lower interest rate, smaller loan amount or longer loan term.
Cons
Longer repayment terms can result in more total interest paid over the course of the loan.
You may have to pay additional fees when taking out a debt consolidation loan.
Your existing lenders may charge prepayment penalties for repaying early.
How to consolidate business debt
The process of business debt consolidation will vary based on your existing debt, business qualifications and lender, among other factors. Here are a few steps to help you get started:
1. Determine which debts to consolidate
Start by making a list of all your current business debts, including loan balances, repayment terms, interest rates and any prepayment penalties. This overview will help you see the full picture of what you owe.
Then, identify which loans are the best candidates for consolidation. Generally, it makes the most sense to consolidate loans with high interest rates, short repayment terms and no prepayment penalties.
Business debt consolidation calculator
2. Evaluate your qualifications
Lenders use your personal credit score, business credit score, time in business and annual revenue to see whether you qualify for a loan. They may also consider additional factors such as your cash flow, sales projections and collateral.
Although some online lenders are willing to work with borrowers who have low credit scores, you’ll get the most competitive rates and terms with a credit score of 650 or higher.
3. Compare options
Research multiple lenders to see what type of business debt consolidation loans they offer and compare factors such as:
- Interest rates.
- Repayment terms.
- Additional fees.
- Funding speed.
- Application process.
- Customer service.
Consider the benefits and drawbacks of any potential loan options as they compare to your current debt obligations. For example, a loan with a longer repayment term may provide lower monthly payments, but you may be paying more interest in the long run. If lowering your monthly payment is your top priority, however, this may be a tradeoff you’re willing to accept.
4. Apply
The application process varies from lender to lender. In general, you’ll need to provide:
- Basic information about you and your business.
- Personal and business bank statements.
- Personal and business tax returns.
- Business financial statements.
- Existing business debt schedule.
5. Sign loan documents and pay off existing debts
If approved, you’ll need to sign a business loan agreement. Review it thoroughly and reach out to your lender if you have questions or need clarification on any of the terms.
You may receive loan funds directly to pay off your existing debts yourself or, in some cases, the lender may pay your debts. You’ll want to discuss the repayment process ahead of time with your lender and also get details about when your first loan payment is due.
Nerdy Perspective
Is a business debt consolidation loan worth it?
A business debt consolidation loan may be worth it if you can qualify for a lower interest rate or better repayment terms. To do this, you'll likely need to show a lender that you have stronger credentials (e.g. credit score, finances) than when you received your original loans.
Business debt consolidation loans may also be worth it if you're having trouble managing multiple debt obligations and would benefit from just one loan.
Business debt consolidation loans may also be worth it if you're having trouble managing multiple debt obligations and would benefit from just one loan.
senior writer covering small business
What to do if you can’t get a business debt consolidation loan
If you don’t qualify for a business debt consolidation loan or decide it’s not the best option for your business, here are some alternatives to consider:
Refinance your business loans
If you can’t roll all your business debt into a single loan, refinancing one or more loans seperately may be a good alternative.
- Pro: Refinancing loans individually could result in a lower interest rate or a lower monthly payment.
- Con: Because you’re not consolidating debt, you’d continue to make multiple payments each month to different lenders.
Create a debt payment strategy
If consolidating or refinancing isn’t possible, employing a debt payment strategy may be an option. For example, if you want to reduce the number of loans, focus on paying more toward the debt with the smallest balance while making minimum payments on the others. After that debt is paid off, move to the next smallest debt.
If you’d rather reduce the amount of interest you’re paying, focus on paying more toward the debt with the highest interest rate while making minimum payments on the others. After that debt is paid off, focus on the debt with the next highest interest rate.
- Pro: The number of lenders you pay each month or the amount of interest you pay will be reduced over time.
- Con: The existing interest rates and monthly payments will remain the same until you pay off the loans.
Restructure your business loans
If you’re having a hard time making monthly debt payments, you can reach out to your lenders to see if you can restructure your loans or make interest-only payments for a while. The goal with restructuring a loan is to find an option that benefits both you and the lender.
- Pro: You may be able to lower the interest rate on the loan, extend the loan term, reduce the loan amount or pause payments for a period of time.
- Con: Restructuring a business loan will usually affect your credit score, but will likely do less damage than defaulting on the debt.
Frequently asked questions
Can you get a business loan to consolidate debt?
Yes. When you get a business consolidation loan, you combine several existing loans into one new loan, simplifying your monthly repayment schedule.
Can an SBA loan be used as a debt consolidation loan?
It depends on the loan program. SBA 7(a) loans, the primary business loan program of the agency, can be used to pay off existing business debt. However, SBA microloans and 504 loans can’t be used to consolidate debt.
Does a business consolidation loan hurt your credit score?
When you apply for a business consolidation loan, the lender will likely perform a hard credit pull that can temporarily ding your credit score. If you make timely repayments, however, a business consolidation loan can help you build your credit — as long as the lender reports your payment history to the consumer and/or commercial credit bureaus.
On the other hand, if you don't make payments and your lender reports to the credit bureaus, this can hurt your credit score.
NerdWallet lead writer Rosalie Murphy contributed to this article.
Article sources
NerdWallet writers are subject matter authorities who use primary,
trustworthy sources to inform their work, including peer-reviewed
studies, government websites, academic research and interviews with
industry experts. All content is fact-checked for accuracy, timeliness
and relevance. You can learn more about NerdWallet's high
standards for journalism by reading our
editorial guidelines.
Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms.
- Flexible payment options.
- Fast funding times.
- Accessible customer service.
- Reporting of payments to business credit bureaus.
- Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
On this page
- What is a business debt consolidation loan?
- Types of business debt consolidation loans
- Best business debt consolidation loan options
- Pros and cons of business debt consolidation loans
- How to consolidate business debt
- What to do if you can’t get a business debt consolidation loan
- Frequently asked questions
