Debt Consolidation Loans

What are business debt consolidation loans?

Running a business requires learning how best to handle business debt. However, unfavourable trading conditions can turn your current debt into a weight that drains cash from your company.

Consider combining several different loans and/or refinancing a single loan if you wish to decrease your debt by lowering the cost of overhauling it.

Restructuring your business debt can be done in two different ways: consolidation and refinancing. To consolidate your debt, you must combine all of your outstanding loans from many different funders into one obligation or loan from a single provider.

In essence, that lender will settle all of your prior debts, meaning you just have one loan to repay. The new loan may come from a previous lender or a brand-new lender.

What are the benefits of debt consolidating loans?

The following are just a few of the several advantages of consolidating debt:

Save Money – By obtaining financing from a lender that offers lower interest rates or better repayment terms and utilizing this money to repay their existing credit facilities, many firms can reduce the cost of paying their loans.
Receiving a reduced interest rate can enable you to make overall repayments more quickly. To lower your monthly payments, save your company money, and boost cash flow, you might also take out a new loan with a longer repayment duration.

Convenience – In most cases, managing a single debt consolidation loan is simpler than managing several facilities. You’ll only need to speak with one lender, and you’ll know exactly how much you need to pay back each month.
You’ll have more time and energy to devote to other things by not having to juggle repayments, calls, and emails with numerous loan providers, frequently linked to various sorts of funding, from asset finance to invoice factoring and revolving credit facilities.

Flexibility – The loans that give you greater breathing space during challenging trading times are ideal for consolidating business debt. Having a single loan rather than several hefty debts spread across your accounts can free up cash flow for alternative uses if revenue declines or expenses rise.
Additionally, having more control over your credit lines may be beneficial if you suddenly need to pay a bill, increase your marketing budget, or recruit additional employees, for example.

Review the following before acting:

What are the benefits of debt consolidating loans?

The following are just a few of the several advantages of consolidating debt:

What are the benefits of a refinancing loan?

Greater flexibility in paying off your obligations may be possible with refinancing. For instance:

Naturally, you must look into the costs of the new lender levies as well as any prepayment penalties levied by your previous lender. In case you wish to refinance again in the future, you might also inquire about the prepayment penalties charged by the new lender.

Secured vs Unsecured Business Loans

There are two primary loan kinds to be aware of when consolidating or refinancing business debt: secured and unsecured loans.

Secured loans

Secured loans

The most typical loan is a secured one.
You will need to provide collateral (security), such as a home, car, or other significant items that are personally owned.
The lender may seize the asset you’ve pledged as security for the loan if you are unable to pay the agreed-upon monthly instalments. Typically, this entails liquidating the asset to satisfy the loan.

Unsecured Loans

Unsecured loans

You don’t have to offer security for an unsecured loan, therefore none of your other assets is in jeopardy. However, this makes loans more difficult to get and reduces your chances of receiving favourable repayment conditions.
You often need to have a very good credit history to be offered an unsecured loan.

Apply for a consolidation loan

Request a call back

How does it work?

Fill in our form​

A member of the team will be in touch to collect some basic information. This helps us understand the type of funding that would best suit your business.

We find the best funding for you

We use the information you provided to source the best funding options for you and your business using our panel of over 250 lenders.

We present your options

We’ll then present you will all of the funding options available to you and give you time to decide which one you would like to proceed with.

Can I get a debt consolidation loan with bad credit?

Having bad credit bad credit when it comes to trying to consolidate your business debt is never a great start, however, there are niche lenders on our panel that will still look to help with loans for bad credit. Given your credit rating might have decreased, meaning higher interest rates, you’ll need to weigh up the pro and cons of any funding options offered to you.

Bad credit will usually steer the lender down the secured debt consolidation loan route, adding additional security and peace of mind. They will look at any existing debt you have, loan amounts, loan rates and will perform a credit check. Depending on your personal circumstances, they may steer towards guarantor loans, asking for a third party to also back any loan offer. This will depend if you can afford to repay on your own and your previous credit scoring. Money troubles can spiral quickly, credit card debt and loans can build up rapidly. You can use a loans calculator to figure out the total amount payable and representative example apr.

If your business is struggling to repay your loan or any type of credit, if you miss a payment this could be affecting your credit score. There is plenty of help on hand if you need some advice, from the national debtline and debt charities. They can advise on debt management plans, a debt solution along with any form of debt advice and the best way to pay off your debt. They are experienced in debt management and dealing with debt with businesses.

What are the benefits of a bridging loan?

Greater flexibility in paying off your obligations may be possible with refinancing. For instance:

Here at Smart Funding Solutions, we have access to a panel of 300+ lenders, meaning we can fly through your loan application with ease and supply you with decisions within 24-48 hours.

What type of debt can I look to consolidate?

You can look at a consolidation loan to pay off things like a credit card, with the balance transferred over to a manageable monthly repayment, removing your card debt with a fixed rate capital and interest loan repayment.
You can look to consolidate any form of business debt and any type of loan into easier-to-manage monthly repayments. It’s important to look at the representative apr for any unsecured debt consolidation loan or secured debt consolidation loan. Some lenders will provide a debt consolidation calculator, with a maximum apr. Compare loans to see if it’s beneficial to consolidate your debt, tools and calculators can help you to make an informed decision.
We can help any business with a registered office in England and Wales, Scotland and Northern Ireland.
Check your eligibility by filling out our enquiry form below and one of our advisors will be in touch.
Smart Funding Solutions are authorised and regulated by the financial conduct authority, FRN 972740. We’re a credit broker, not a lender.

Frequently Asked Questions

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A debt consolidation loan is a loan that combines all your existing debts into a single, larger loan with one monthly payment.

With a debt consolidation loan, you can take out a loan that covers the total amount of your existing debts. This leaves you with one loan and one interest rate to manage, making your debt easier to handle.

Debt consolidation loans can provide a range of benefits including simplifying the repayment process, lowering your monthly payments, and reducing the overall interest paid on your debts.

Typically, any type of secured or unsecured debt, such as credit card debt, short-term loans, high-interest loans can be consolidated using a debt consolidation loan.

Consolidation involves combining all of your outstanding debts into one obligation or loan from a single provider. Refinancing, on the other hand, involves taking out a new loan to pay off an existing loan.

To qualify for a debt consolidation loan, you generally need to have a good business credit score and proof of affordability by way of financial accounts and bank statements to ensure that you can afford the monthly payments.

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There are two main types of debt consolidation loans: secured and unsecured. A secured loan requires collateral, such as a home or vehicle, while an unsecured loan does not.

Your credit score plays a significant role in determining if you qualify for a debt consolidation loan. Lenders will use your credit score to determine your interest rate and loan terms.

Yes, some lenders offer debt consolidation loans to businesses with bad credit. However, these loans may come with higher interest rates and stricter eligibility requirements.

Yes, you can get an unsecured debt consolidation loan without offering collateral. However, the loan may come with higher interest rates and shorter terms.

The repayment term for a debt consolidation loan can range from 12 months to several years, depending on your loan terms. In most cases, it takes around 2-5 years to pay off a debt consolidation loan.

Consolidating your debt can be a great way to get your finances back on track, but it’s important to be aware of the risks. If you default on your loan, you could end up losing your collateral or damaging your credit score. It’s essential to make sure you can afford the monthly payments before taking out a debt consolidation loan.

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