Best of
Best Loans to Consolidate Your Business Debt
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Consolidating business debt with a lower-interest business loan can boost your cash flow by lowering your monthly payment and shortening your repayment period.
Financially-savvy small-business owners looking to free up some extra cash might consider refinancing or consolidating loans that have high interest rates. Refinancing or consolidating could lower your monthly payments and help you grow your business. Before you jump in, consider the difference between these two financing strategies:
Debt consolidation combines several loans or merchant cash advances into one loan — ideally with a lower interest rate that could result in lower payments and a shorter repayment period.
Debt refinancing means you take out a lower-interest loan and use it to pay off the original, thereby saving money.
Besides banks, you can turn to online small-business loans for business debt consolidation and refinancing. Here are our top three recommendations, ranked by cost of financing.
LOOKING FOR CORONAVIRUS BENEFITS INFORMATION?
Financially-savvy small-business owners looking to free up some extra cash might consider refinancing or consolidating loans that have high interest rates. Refinancing or consolidating could lower your monthly payments and help you grow your business. Before you jump in, consider the difference between these two financing strategies:
Debt consolidation combines several loans or merchant cash advances into one loan — ideally with a lower interest rate that could result in lower payments and a shorter repayment period.
Debt refinancing means you take out a lower-interest loan and use it to pay off the original, thereby saving money.
Besides banks, you can turn to online small-business loans for business debt consolidation and refinancing. Here are our top three recommendations, ranked by cost of financing.
LOOKING FOR CORONAVIRUS BENEFITS INFORMATION?
Easily get real, personalized small business loan rates to compare — not just ranges or estimates.
It’s free and won’t affect your credit.
on Fundera's website
Our pick for
The lowest rates
SmartBiz - SBA loan
Est. APR
6.73 - 10.29%
Min. Credit Score
650
Pros
- Competitive rates among online lenders.
- Faster than getting an SBA loan from a bank.
Cons
- Must have strong financials, supported by personal and business tax returns for the past 3 years.
- Stringent rules on use of proceeds.
- Requires business lien and personal guarantee.
Pros
- Competitive rates among online lenders.
- Faster than getting an SBA loan from a bank.
Cons
- Must have strong financials, supported by personal and business tax returns for the past 3 years.
- Stringent rules on use of proceeds.
- Requires business lien and personal guarantee.
Qualifications
- Minimum credit score: 650.
- Minimum time in business: 2 years.
- Minimum annual revenue: $50,000.
- No bankruptcies or foreclosures in the past 3 years.
Our pick for
Businesses with low revenue
Funding Circle - Online term loan
Est. APR
12.18 - 36.00%
Min. Credit Score
660
Pros
- Cash can be available within 3 business days.
- Competitive rates among online lenders.
- No minimum revenue requirement.
Cons
- Requires business lien and personal guarantee.
Pros
- Cash can be available within 3 business days.
- Competitive rates among online lenders.
- No minimum revenue requirement.
Cons
- Requires business lien and personal guarantee.
Qualifications
- Minimum credit score: 660.
- Minimum time in business: 2 years.
- Minimum annual revenue: None.
- No bankruptices in the past 7 years.
Our pick for
Businesses at least 2 years old
Credibility Capital - Online term loan
Est. APR
19.99 - 24.99%
Min. Credit Score
680
Pros
- Competitive rates among online lenders.
- No prepayment penalty.
- Extra monthly payments can save interest cost.
Cons
- Short repayment term results in higher payment amounts.
- Requires high minimum credit score and revenue.
- Requires business lien and may require personal guarantee.
- Not available in Nevada, North Dakota, South Dakota, or Vermont.
Pros
- Competitive rates among online lenders.
- No prepayment penalty.
- Extra monthly payments can save interest cost.
Cons
- Short repayment term results in higher payment amounts.
- Requires high minimum credit score and revenue.
- Requires business lien and may require personal guarantee.
- Not available in Nevada, North Dakota, South Dakota, or Vermont.
Qualifications
- Minimum credit score: 680.
- Minimum time in business: 2 years.
- Minimum annual revenue: $250,000.
- No bankruptcies in the past 5 years.
Easily get real, personalized small business loan rates to compare — not just ranges or estimates.
It’s free and won’t affect your credit.
on Fundera's website
Summary of Best Loans to Consolidate Your Business Debt
| Lender | Best For | Est. APR | Min. Credit Score |
|---|---|---|---|
SmartBiz - SBA loan | Best for The lowest rates | 6.73 - 10.29% | 650 |
Funding Circle - Online term loan | Best for Businesses with low revenue | 12.18 - 36.00% | 660 |
Credibility Capital - Online term loan | Best for Businesses at least 2 years old | 19.99 - 24.99% | 680 |
1. SmartBiz: For the lowest rates
When combining your business debt into one bundle, you want the lowest possible annual percentage rates. That makes SmartBiz your most attractive option. The online platform connects business owners with loans backed by the Small Business Administration, which have the most competitive rates on the market.
2. Funding Circle: For businesses with low revenue
Established businesses looking for competitive APRs and fast cash might want to check out Funding Circle. Its application process takes about 10 days but is still faster than SmartBiz, making it a solid option for healthy businesses looking for faster financing.
3. Credibility Capital: For businesses at least 2 years old
Credibility Capital offers short-term financing — one, two or three years — to companies with good credit, making it a valid option for businesses looking to refinance expensive debt. Three years is the shortest maximum repayment period among the lenders in our list.
Find and compare small-business loans
NerdWallet has created a list of the best small-business loans to meet your needs and goals. We gauged lender trustworthiness, market scope and user experience, among other factors, and arranged the lenders by categories that include your revenue and how long you’ve been in business.
Last updated on April 7, 2020
To recap our selections...
NerdWallet's Best Loans to Consolidate Your Business Debt
- SmartBiz - SBA loan: Best for The lowest rates
- Funding Circle - Online term loan: Best for Businesses with low revenue
- Credibility Capital - Online term loan: Best for Businesses at least 2 years old
