I Want to Consolidate My Business Debt to Pay Lower Rates

“Dear Michael,

We have Business debt – trying to pay off w/low interest rates.

Can you recommend a reputable debt consolidation company? One that can, before we sign any documents or close any of our accounts, guarantee us the interest rates they claim they can offer us? We don’t wish to settle, we want to pay the amount we owe, just with lower interest rates so that we can possibly pay off what’s owed within 3 -4 years.

Any information would be much appreciated.



I would encourage you to start off with talking to a credit counseling agency about consolidating your credit card and loans into one lower payment. You can reach one by calling the sites hotline number 800-268-2979.

If all of the accounts you need to consolidate with a lower interest rate are business debts, and not personally guaranteed, credit counseling may not be able to assist you in the same way they are able to get consumer debts (credit cards, personal loans, store accounts, gas cards) set up with one lower monthly payment.

Most of my experiences working with small businesses over the years are that we tend to open credit cards, and take personal loans, with a personal guarantee.

Consolidating your debt with a credit counseling agency

Not all debts can be consolidated. And some that can be, may not yield any or enough of an interest rate reduction. Because a creditors criteria for payment reduction is a moving target from one persons account to the next, the only way to get a to the penny consolidation quote is to call and talk to the credit counseling agency.

You will typically be able to learn which accounts can be consolidated, and which cannot, before signing on and paying anything to a credit counseling company.

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You should also be able to get an accurate “to the penny” quote of what your consolidated monthly payment will be, and prior to signing any paperwork, or paying anything to the company.

What if you cannot consolidate all of your accounts?

If some of your accounts cannot be consolidated through credit counseling, it may still be a benefit to consolidate the ones that can. Perhaps your business accounts with only one bank cannot be included. But that same bank would respond well to your inquiry of payment reduction options. Maybe there are two banks you have to get creative with about how to reduce your payments. If that happens, post an update in the comments below with the bank name, balances owed, and the interest rates. You may be able to get some actionable feedback about how to manage those outside of consolidation.

What if the consolidation payment is not enough payment relief? That is a real concern. What are your interest rates now? Assume your new consolidated monthly payment is 2 percent of your combined balances. Can you afford to pay that exact amount for the next four or so years?

There are consolidation loan alternatives

Business loan consolidations are possible. But I see less attractive options for businesses to consolidate since the economic downturn.

If your D&B rating is good, and your personal credit scores high (as a small business owner), it may make sense to look into consolidation loan products.

What type of business do you own? Is it seasonal? Do you use vendor financing?

Post answers to any question in the comments below for feedback. Anyone with questions or concerns about consolidating business debt, or a combination of business and personal debts, into one lower monthly payment, is welcome to post comments for feedback.

You may also want to consider a debt consolidation loan through LendingClub.com.

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Michael Bovee founded CRN, a unique company offering debt negotiation education and services, in 2004. Bovee has been contributing articles and free reader feedback on this site for several years.

Michael is a debt industry professional who has volunteered his time to help answer reader questions.

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