There are several debt-consolidation options for small businesses. The three primary options involve acquiring a debt-consolidation loan, acquiring a small business loan or seeking commercial debt counseling.
Gather credit, loan and bill statements. To gain a full understanding of how much debt the business has, pull together all of your debt statements.
Categorize the debt. As you review each statement, decide if it is debt that needs to be paid now or if it can be put off until later. You may choose to consolidate some debts and not others, or you may wish to consolidate the total debt the business has.
Compare the interest rates, fees, terms and conditions of potential debt-consolidation options before deciding which one will be the most beneficial to your business situation.
Obtain a debt-consolidation loan from a Small Business Association lender. These types of loans are only beneficial when you can obtain a lower interest rate than what you are currently paying on your business debts combined. A debt consolidation loan is also beneficial when the term of the loan doesn’t extend beyond existing debt terms. For example, if you are scheduled to pay off existing debt now in 10 years, but the debt-consolidation loan stretches the payoff date to 20 years, then you end up paying more in the long-run than if you would have kept the business debt status quo.
Obtain a small business loan from a private or commercial lender. The same rules apply to a small business loan as those of a debt-consolidation loan.
Seek commercial debt counseling from a company that specializes in business-debt consolidation. Commercial debt counseling will help you create a plan for paying off the business debt, and the debt counselor assigned to your business will help you carry out the plan. Typically, as part of the payment you make to the debt consolidation loan or to the business creditors, the debt consolidation company tacks on a fee for its services.