What Is Business Debt Consolidation?
Business debt consolidation involves combining multiple separate business debts — such as loans, overdrafts, MCAs or credit lines — into a single facility with one monthly payment. The goal is to simplify your finances, reduce the total monthly outgoing, and often secure a lower overall interest rate.
When Should You Consider It?
- You have multiple lenders requiring separate repayments each month
- Your monthly debt service is straining cash flow
- You have high-cost short-term debt (MCAs, overdrafts, emergency loans) you want to refinance at a lower rate
- You want to free up working capital and simplify financial management
- Your business trading has improved and you now qualify for better terms
How Much Can I Consolidate?
Consolidation facilities typically range from £25,000 to £1,000,000+ depending on total debt levels, business performance and available security. Both unsecured and secured options are available.
What Are The Benefits?
- One payment — simplify multiple obligations into a single monthly figure
- Lower monthly cost — by extending the term, monthly repayments can reduce significantly
- Better rates — consolidating high-cost debt into a term loan at a lower rate reduces total cost
- Improved cash flow — freeing up monthly cash can support growth or reduce financial stress
What Are The Interest Rates?
Rates for consolidation facilities depend on whether the loan is secured or unsecured, your trading history, and the lenders available to you. Rates typically start from 6.9% per annum for established businesses with a good credit profile.
Is There A Risk?
Consolidating short-term debt into a longer term reduces monthly payments but increases the total amount of interest paid over the life of the facility. Your broker will help you compare total cost of capital — not just monthly payments — to ensure consolidation makes sense for your business.