Business Debt Consolidation Loans

Sep 30, 2021

George Holmes

George Holmes

Managing Director + Co-Founder

What is business debt consolidation?

Business debt consolidation is the process of grouping together your current business debts into one loan and repayment schedule. It’s most common for personal loans however you can access both for small and medium businesses too.

How does debt refinancing differ from consolidation?

People often use these terms interchangeably when talking about business finance; however, in technical terms, they are different. Where business debt consolidation is about grouping multiple debts into one loan, debt refinancing is about getting a single debt at a lower rate. This will normally involve a new lender paying off your debt at a reduced fee and offering you lower repayments over longer terms. At Aurora Capital, we can help you and your business find great deals in both.

What are the benefits of business debt consolidation loans for small businesses?

From reduced APR to lower monthly payments, additional borrowing to better cash flow management, there are several benefits to these types of finance. Read on for a quick guide to the reasons why you may need business debt consolidation:

  • Reduced APR – When consolidating your business debt, you’re simply moving all debt into repayment. By making sure your terms are better than your current average for all debts, you’ll be able to reduce your overall APR. This is nearly always guaranteed when refinancing short-term loans as these feature higher rates than longer-term debt consolidation loans.
  • Lower monthly payments – Because debt consolidation loans and refinancing have lower APR rates and longer terms than most other business loans, you’ll end up paying less per month. You need to remember that you’ll likely be paying off your debt for longer, but if cash-flow is a constant struggle for your business, debt refinancing or consolidation may be the answer.
  • Additional borrowing – As you’ll be paying less per month, you can acquire extra funding when consolidating current debts. This will be judged on a case by case basis so get in touch with one of our team to find out if you’re eligible. If you have bad credit and you’re looking for further borrowing, it may be worth checking out our CCJ loans for business.
  • Easier cash flow management – Managing a single account is much easier than having several debts requiring payments, potentially on different dates and from different accounts. On top of streamlining your payments into one easy-to-manage single account, you’ll also be paying less, increasing your cash-flow and helping your business function as it needs.
  • Increased revolving credit – If you’re consolidating a business credit card loan, you may be able to free up that revolving credit for re-use. Business credit cards are incredibly useful for employers, helping staff make payments, keeping track of those payments, while managing unexpected costs too.

If you would like to get in touch and find out more information on alternative funding, please call the team on 01371 870 815 or email info@auroracapital.co.uk– we’re more than happy to help!

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