Refinancing and consolidating business debt

Can you refinance business debt?

Yes, if the new payment is affordable and the lender can see it is affordable. Lenders refinance when the result improves your cash flow, typically by cutting the monthly payment by 10% or more. SBA 7(a) allows refinancing of business debt when the existing terms are unreasonable, which includes most advances and short term loans, and when the new loan improves cash flow meaningfully.

You usually cannot refinance when the debt is the symptom of a business that is losing money, when there are three or more advances, or when deposits have fallen for three months. In those cases the first step is stabilizing the business, not another loan. See cash flow gaps for the short term options.

Which products will consider you, ranked by fit

Ranked by the quality of the outcome:

1. SBA 7(a): the best result, a ten year term at prime plus a set spread, which can cut the payment on advances by half or more.
2. A bank term loan, for businesses with two years of returns and credit above 680, consolidating one or two loans.
3. An online term loan over two to five years, faster and more lenient, consolidating advances for businesses with steady deposits.
4. Equipment refinancing or a sale leaseback, borrowing against equipment you own outright to pay off expensive debt.
5. A commercial real estate cash out refinance if the business owns its building.
6. Reverse consolidation, which does not pay off your advances but spreads the payments; expensive, a last resort.

Which products will decline you, so you stop wasting applications

Merchant cash advance companies will happily give you another advance, which is not a refinance and makes the problem worse. Most other lenders decline when they see three or more open advances, because a UCC search shows them and a new loan would sit behind them. Banks decline when the tax return shows a loss or the debt covered losses rather than purchases. Unsecured lenders decline when total debt payments already exceed a third of monthly deposits.

Equipment and real estate refinances decline when the asset has already been pledged under a blanket lien, which many advances and online loans file. Check your UCC filings before you apply.

How to improve your odds in 30, 90 and 180 days

In 30 days: stop taking new debt, full stop. List every loan and advance with its balance, payment and payoff amount, and request payoff letters. Build a simple cash flow summary showing current payments against deposits and what the payments would be after a refinance.

In 90 days: with three months of no new debt and stable deposits, apply to term lenders for a consolidation. Ask for a term that drops the total monthly payment by at least 20%. Make sure the new lender pays the old ones at closing and terminates their UCC filings.

In 180 days: with six clean months and a lower payment, apply to an SBA lender for a full refinance into a ten year term. Read DSCR explained so you can present the coverage the lender wants to see.

What will it cost compared with a standard borrower?

A refinance that works costs less than what you have, which is the point. Moving $150,000 of advances at factor rates of 1.35 repaid over nine months into a five year term loan at 18% APR typically cuts the monthly payment by more than half. Moving it into SBA 7(a) at prime plus 3% over ten years cuts it further. Expect an origination fee of 1% to 5% on online term loans and an SBA guarantee fee of about 2% to 3.75% on the guaranteed portion.

The cost in flexibility is a longer commitment and often a lien on more assets; what it buys is a path back to bank pricing. Compare your current and proposed payments in the business loan calculator before you decide.

How to apply

Apply once here with your bank statements, a list of current debts with payoff amounts, and your tax returns, and your application reaches SBA, bank, online term and asset refinance lenders together. Or connect your AI assistant to our MCP server through the agents hub and let it read your statements and loan agreements, build the application and submit it. It is free to the business, and offers come back to the same place for comparison.