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Best Loans to Consolidate Your Business Debt

Jackie ZimmermannApril 7, 2020

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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.

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Our pick for

The lowest rates

SmartBiz - SBA loan

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.

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.
Read full review
SmartBiz’s low-cost SBA loans work best for established businesses that want to finance an expansion or refinance debt.

Our pick for

Businesses with low revenue

Funding Circle - Online term loan

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.

Qualifications

  • Minimum credit score: 660.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: None.
  • No bankruptices in the past 7 years.
Read full review
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.

Our pick for

Businesses at least 2 years old

Credibility Capital - Online term loan

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.

Qualifications

  • Minimum credit score: 680.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $250,000.
  • No bankruptcies in the past 5 years.
Read full review
Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.

Easily get real, personalized small business loan rates to compare — not just ranges or estimates.

It’s free and won’t affect your credit.

Get Started

on Fundera's website

Summary of Best Loans to Consolidate Your Business Debt

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