Key takeaways

  • The best business debt consolidation loans will offer you longer repayment terms or lower interest rates
  • You can use a variety of business loans to pay off current business debt, including an SBA loan, line of credit or short-term loan
  • Compare multiple debt consolidation lenders to find the best fit for your business

Business debt consolidation loans come in handy when you want to take your existing business debt and roll it into a new loan — allowing you to only have one payment. You can use many types of business loans to pay off business debt, including some SBA loans, which are backed by the U.S. government and offer competitive terms.

But you’ll want to compare different lenders to find the best loan offer possible. Ideally, the new loan will offer lower interest rates or longer repayment terms, both of which lower the monthly payment, to make consolidating your business debts worth it.

Look at the top lenders and types of loans that provide low interest rates, high loan amounts or long repayment terms.

Compare the best business debt consolidation loans

Lender Loan type Loan amounts Bankrate score
SBA SBA Up to $5.5 million 4.8
Funding Circle Long-term loan $25,000 to $500,000 4.6
Fundible Business line of credit $1,000 to $500,000 4.7
Accion Opportunity Fund Term loan $5,000 to $250,000 4.2
Fora Financial Short-term loan $5,000 to $1.5 million 4.5
Backd Working capital loan $10,000 to $2 million 4.6
Best for high loan amounts


Rating: 4.8 stars out of 5
Learn more in our Bankrate review
Funding Circle
Best for long terms

Funding Circle

Rating: 4.6 stars out of 5
Learn more in our Bankrate review
Best for business line of credit


Rating: 4.7 stars out of 5
Learn more in our Bankrate review
Accion Opportunity Fund
Best for bad credit and low interest rates

Accion Opportunity Fund

Rating: 4.2 stars out of 5
Learn more in our Bankrate review
Fora Financial
Best for short-term debt consolidation

Fora Financial

Rating: 4.5 stars out of 5
Learn more in our Bankrate review
Best for fast funding


Rating: 4.6 stars out of 5
Learn more in our Bankrate review

What is a business debt consolidation loan?

A business debt consolidation loan is any business loan used to pay off other business loans and debt, allowing you to make a single monthly payment. You may consider getting a debt consolidation loan for your business if the new loan offers a longer repayment term or lower interest rates than your current loans.

You may also want a consolidated loan to make it easier to track and repay your business debts using a single payment. But beware that the new business loan could cost you more than your current loans if the new interest rate is higher than what you currently have.

You could also pay more if you choose a longer repayment term since you’ll be paying interest for a longer period. You might want to choose this strategy only if you need the lower payments. Use a business loan calculator to estimate your loan costs and determine whether the new loan offers the true benefits of longer or lower payments that you need.

What is the difference between business debt consolidation and refinancing?

A debt consolidation business loan is similar to refinancing in that you take out a new loan to pay off an initial business loan. The main difference is that refinancing involves taking out a new loan to pay off only one loan, while business debt consolidation involves taking out one loan to pay off several business loans — allowing you to have one monthly payment versus several.

Bankrate insight
You may consider refinancing a business loan when you can get more favorable interest rates or longer terms with a new business loan. It’s easier to find more favorable terms for one loan than it is if you were consolidating multiple business loans. Keep in mind that longer terms can help you lower monthly payments, but you may pay more in interest in the long run.

How to consolidate business debt

To get started with consolidating your business debt, follow these steps:

  1. Apply or prequalify for business loans from multiple lenders.
  2. Compare the loan offers, looking at the interest rates, total interest charged and repayment terms offered.
  3. Choose the business loan with the best offer from your preferred lender.
  4. Finalize the new business loan by filling out the application, getting approved and making your payment.
  5. Wait to receive the loan funds, which can take anywhere from 24 hours to a few weeks, depending on the lender.
  6. Use the loan funds to pay off your other business loans.
  7. Continue making the consolidated business loan payment until the loan is paid off.

Bottom line

You can use many types of business loans to pay off your current business loans and consolidate your debts. When applying for a loan, you simply need to state that the purpose of funding is to pay off business debts.

But, the best business debt consolidation loans will offer you lower interest rates or longer repayment terms than your current loans. These favorable terms will either lower your monthly payments or help you save money in interest. To be sure that you’re getting the best offer, you can prequalify with several business lenders to see what loan features they offer you.

Frequently asked questions

  • Business debt consolidation may be a good idea if you can get more favorable repayment terms or interest rates than you have with your current business loans. It may also be a good idea if you struggle to manage multiple business loan repayments. Business debt consolidation will help you by whittling multiple loan payments into a single business loan payment.
  • Business debt consolidation could lower your credit score slightly since you’re applying for a new business loan and closing down old accounts. However, your business credit score should recover quickly if you make on-time payments with the new loan.
  • Yes, you can use a small business loan to consolidate previous business debts. The lender may ask you for the purpose of the loan funds during the application, so you’ll need to tell the lender that the purpose is to pay off debts.