Debt consolidation can be highly beneficial for a business, because it combines several outstanding debts into a single one, sometimes with a lower overall interest rate. It’s also a lot less hassle to manage a single debt than it is to keep track of numerous loans you may have. Here are some of the best ways of accomplishing a debt consolidation for your small business.

Traditional bank loans

If your business qualifies for a traditional bank loan, that’s usually the best avenue to accomplish debt consolidation. You will generally get the most favorable interest rates from banks, as well as the longest repayment periods. The biggest drawback to a traditional bank loan is that approvals are relatively hard to come by.

SBA loans

It’s somewhat easier to qualify for an SBA loan than it is for traditional bank loan. Since the Small Business Administration guarantees a portion of the loan, it’s easier for you to be approved by a lender. You still have to be approved by the SBA itself, but if you do get that approval, it would be possible to obtain a loan of up to $5 million under the SBA 7(a) loan program.

Online lenders

Over the past decade or so, a number of alternative lenders have sprung up to fill the gap left by a high disapproval rate by traditional lenders such as banks. Many of these online lenders fund debt consolidation for your company, as long as you’re willing to accept a higher interest rate and a generally shorter repayment period. The reason that you will generally encounter shorter repayment terms and higher interest rates from these lenders is that their risk is greater in extending such loans. Since they generally offer a much higher approval rate, they must offset their risk as much as possible.

Debt consolidation with Dhanani Funding 

Consolidating your business debts can be a very beneficial move for your company, and can be much easier on your accounting. Contact Dhanani Funding with any questions you may have about debt consolidation options we can provide, or to explore other ways in which we can help your business financially.