Managing multiple small-business loans can be stressful. A business debt consolidation loan can simplify your payments and may save you money.
Below, compare our picks for the best business debt consolidation loans or scroll down for more information on how to get one.
Best business debt consolidation loan options
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| Product | Max loan amount | Min. credit score | |
|---|---|---|---|
 Fora Financial - Online term loan Nerdwallet Rating 4.7 with NerdWallet Small Business | $1,500,000 | 570 | with NerdWallet Small Business |
 Bluevine - Line of credit Nerdwallet Rating 5.0 with NerdWallet Small Business | $200,000 | 625 | with NerdWallet Small Business |
 SBA 7(a) loan with NerdWallet Small Business | $5,000,000 | 650 | with NerdWallet Small Business |
 Bank of America Business Advantage Secured Term Loan Nerdwallet Rating 4.4 with NerdWallet Small Business | $250,000 | 700 | with NerdWallet Small Business |
 Accion Opportunity Fund Small Business Working Capital Loan Nerdwallet Rating 4.8 with NerdWallet Small Business | $250,000 | 620 | with NerdWallet Small Business |
 OnDeck - Online term loan Nerdwallet Rating 4.9 with NerdWallet Small Business | $400,000 | 625 | with NerdWallet Small Business |
 iBusiness Funding - Online term loan Nerdwallet Rating 4.0 with NerdWallet Small Business | $500,000 | 660 | with NerdWallet Small Business |
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 better terms to pay off an existing one. 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’s how to think about which one fits your situation:
Bank loans: Best if you have strong credit and can wait for funding
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 the lender can take those assets if you don’t repay the loan.
SBA loans: Best for competitive rates with a bit more flexibility than a bank
SBA loans are a strong alternative to bank loans, with competitive rates and long terms. The 7(a) loan program is the SBA’s main loan program, and you can use it to refinance 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. Still, you’ll usually need good credit and a few years in business — and funding can be slow.
Online business loans: Best if you need cash fast or have less-than-perfect credit
Online business loans may be a good option for newer businesses or those with fair or bad credit. They typically have flexible qualification requirements, but interest rates are higher and repayment terms are shorter. These loans tend to fund much more quickly than bank and SBA loans.
Nonprofit loans: Best for traditionally underserved business owners
Nonprofit lenders serve low-income and underserved communities, including women, minority and veteran business owners. Loan options — and the rules on how you can spend the money — vary 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.
Pros and cons of business debt consolidation loans
Pros
You make one regular payment instead of several daily, weekly or monthly ones. This can improve your cash flow.
Consolidation 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 current lenders may charge a fee if you pay a loan off early.
How to consolidate business debt
The process of business debt consolidation will vary based on your existing debt, 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 will consider the following to see whether you qualify for a loan:
- Personal credit score.
- Business credit score.
- Time in business.
- Annual revenue.
- Cash flow.
- Sales projections.
- Available collateral.
Some online lenders work with borrowers who have low credit scores. Still, you’ll usually get the best rates and terms with a score of 650 or higher. In fact, 73% of debt refinancing/consolidation borrowers approved through NerdWallet Small Business between July 2024 and March 2026 reported a credit score of 660 or higher. Exact minimums vary by lender.
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 trade-off you’re willing to accept.
Here’s what that trade-off looks like in practice. Say you’re consolidating $100,000 in existing debt at a 9% APR. Note how the term length alone changes what you’ll pay:
3-year term | 5-year term | 7-year term | |
Monthly payment | $3,179.97. | $2,075.84. | $1,608.91. |
Total interest paid | $14,478.92. | $24,550.40. | $35,148.44. |
Stretching that same $100,000 loan from three to seven years cuts your payment by more than $1,500 — but adds over $20,000 in interest over the life of the loan. Neither choice is right or wrong; it depends on whether you need the cash flow relief now or can handle higher payments to save on interest overall.
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.
Once your existing debts are paid off, get written payoff confirmation from each original lender and verify that those accounts show a zero balance. This protects you if a payment is misapplied or a balance isn’t fully cleared — which you might not catch otherwise until it’s impacted your credit score.
Is a business debt consolidation loan worth it?
Use these guidelines to decide if debt consolidation is a worthwhile choice for your business.
Consolidate if:
- You have merchant cash advances or short-term online loans with daily or weekly payments. These carry the highest borrowing costs, so replacing them with a lower-rate loan with monthly payments usually saves the most money.
- Your credit score or revenue has improved since you borrowed. This will help you get a better rate.
Don’t consolidate if:
- Your only goal is a lower monthly payment and you’d have to stretch the term for years to get it. You may pay thousands more in interest.
- Prepayment penalties on your current loans cost more than you’d save. Run those numbers before you apply.
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 separately 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, using 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 agency’s main loan program — can pay off existing business debt. SBA microloans can’t. SBA 504 loans are meant for fixed assets like real estate and equipment, but can sometimes include debt consolidation if you meet the SBA’s conditions.
Does a business consolidation loan hurt your credit score?
When you apply for a business consolidation loan, the lender will likely run a hard credit check. This can lower your credit score for a short time. 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.
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.
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.
- 1.NerdWallet. 2026 Business Loan Study.
- 2.U.S. Small Business Administration. SOP 50 10 Lender and Development Company Loan Programs.
