To consolidate your business debt, take out a new business loan and use the funds to pay off your existing debt from credit cards and other loans. This merges all your debts into one loan with one monthly payment, often with a lower interest rate and more favorable terms, depending on your creditworthiness.
There are several ways to consolidate business debt, but business debt consolidation loans and balance transfer credit cards are the most common methods.
Commercial debt consolidation loans
Commercial debt consolidation loans are available from traditional financial institutions and online lenders. Some lenders specialize in debt consolidation while others provide general business loans that you can use for a variety of purposes.
Depending on the lender, business debt consolidation loans can have lower interest rates than other business loans, making them an attractive option for businesses that want to lower the cost of their debt.
Business credit cards with balance transfer
Business credit cards with balance transfer involves transferring balances from existing business credit accounts to a new credit card with a lower interest rate. As with consolidation loans, this can be an effective way to reduce the cost of your debts, especially if you qualify for a 0% APR introductory period. To take advantage of these benefits, you must pay off the entire debt balance before the end of the 0% interest period, and you may be required to pay a balance transfer fee.