Debt Consolidation Loans

A business debt consolidation loan is a single loan that is taken out to pay off all other loans. Rather than having to manage payments to many different creditors each month, businesses only have to pay one creditor with a debt consolidation loan. In addition, businesses often can lower their interest rates by consolidating.Obtaining a debt consolidation loan for a business is significantly more difficult than obtaining one for an individual. Because business debt consolidation loans likely will cover large amounts of debt, such disbursals are very risky for lenders.Businesses are created for the sole purpose of creating revenue, so if revenue is not enough to cover costs, then lenders would like to know the reasons for this before they dispense money.

Some reasons are considered understandable, like if your company incurred a large expense for which you were not planning. Other reasons, however, such as poor management, may indicate a situation with which lenders will not want to be involved. There are both secured and unsecured debt consolidation loans for businesses. Unsecured loans, or those that do not require any property to be put up as collateral, may be obtained only for small debts. These are very difficult to obtain, and always come with high interest rates.Secured loans require that a valuable piece of property, such as a home, be attached to the agreement. In the event that your business fails to repay the loan, the property will be seized for payment. Consequently, these are easier to obtain and at better interest rates