Business debt consolidation means taking one new facility, using it to repay several existing ones, and being left with a single payment. Business loan consolidation is the same thing where the debt being replaced is term loans rather than cards or advances. Done properly it lowers what you pay each month, cuts the total interest, or both. Done carelessly it does the opposite, and stretches a short problem over five years.
We arrange consolidation facilities from £10,000 to £10 million for UK limited companies and LLPs, across a panel of 135+ lenders. The test we apply is simple. If the new facility does not reduce the total amount you repay, or does not solve a cash flow problem worth paying for, we will tell you not to do it.
Written by Marcus Wright, owner and founder of Bolton Business Finance Ltd, in financial services since 2008 and a commercial finance broker since March 2019. Last reviewed September 2026.
On this page
- What business debt consolidation means
- Business loan consolidation, where the debt is term loans
- What can be consolidated
- Business credit card consolidation
- Consolidating a Capital on Tap balance
- Stacked merchant cash advances
- Worked example
- When it works and when it does not
- What it costs
- Eligibility
- How to apply
- Business debt consolidation questions answered
The short version
- Business debt consolidation replaces several facilities with one. Business loan consolidation is the same process where the facilities being replaced are term loans.
- The point is not a lower monthly payment on its own. A lower payment over a longer term usually costs more in total. The point is a lower total cost, or a payment the business can actually meet.
- It works best on expensive short term debt, above all a business credit card balance carried month to month, stacked merchant cash advances, and short term loans taken in a hurry.
- We arrange from £10,000 to £10 million. Unsecured from around 6.9% per annum for strong companies, higher where the risk is greater. Secured against property from around 4% per annum.
- If you are a sole trader borrowing £25,000 or less for business purposes, that is a regulated credit agreement and we cannot arrange it. An FCA authorised lender or broker can.
- We arrange a new facility that repays the old ones. We do not give debt advice, we do not negotiate with your existing creditors and we do not run debt management plans. If the business cannot service its debt at any price, consolidation is the wrong answer and we will say so.
| Item | Detail |
|---|---|
| What it is | One new facility used to repay several existing ones, leaving a single monthly payment |
| Who it is for | UK limited companies and LLPs. Sole traders and small partnerships only where the credit exceeds £25,000 and is wholly or predominantly for business purposes |
| Amount | £10,000 to £10 million |
| Rates from | Around 6.9% per annum unsecured, around 4% per annum secured on property. Higher where the risk or the existing debt profile is worse |
| Term | 1 to 7 years unsecured, up to 10 years secured |
| Speed | Offers back in as little as 24 hours unsecured. Secured takes 2 to 6 weeks |
| Security | Usually a director’s personal guarantee on unsecured. A charge over property on secured |
| Best suited to | Business credit card balances, stacked merchant cash advances, and multiple short term loans |
| Broker fee | None on unsecured. £495 upfront plus 1% on completion where the facility is secured on property |
What business debt consolidation means
Business debt consolidation is the process of borrowing once to repay several existing business debts, so that the business is left owing one lender on one set of terms instead of several lenders on several. The new facility is usually a term loan, sometimes secured against property, and the old facilities are settled on the day it draws down.
It is not debt forgiveness and it is not a restructuring. The business still owes the same money. What changes is the price of the money, the shape of the repayments, and the number of people it has to deal with.
There are three reasons a company does it, and they are not the same reason:
- To pay less in total. The existing debt is expensive, usually because it is a credit card balance or a short term facility, and a term loan at a lower rate costs less over the life of the borrowing. This is the only version that makes the business better off in cash terms.
- To make the payments affordable. The debt is not necessarily overpriced, but repaying it over eighteen months is strangling the business and repaying it over five years would not. This costs more in total and can still be the right call.
- To simplify. Six direct debits on six dates with six sets of terms is an administrative burden and a source of missed payments. On its own this is the weakest reason, and rarely worth paying for.
Be clear which one you are buying before you start. They lead to different facilities.
Business loan consolidation, where the debt is term loans
Business loan consolidation is the narrower case: the debt being replaced is already term loans, taken at different times from different lenders, each with its own rate, term and end date.
This version deserves more scepticism than card or advance consolidation, because term loans are usually the cheapest debt a company holds. If you took a loan at 9% two years ago and you are being offered 14% today, consolidating it in with everything else makes that portion of the debt worse, not better. It is common for the right answer to be partial: consolidate the expensive facilities and leave the cheap loan running.
Always ask for settlement figures, not balances. A term loan settled early may carry an early repayment charge, and some short term facilities carry the full remaining interest on settlement. The balance on your statement is not what it costs to clear the debt. Get the settlement figure in writing from each lender before any arithmetic is done, and put those figures into the business loan consolidation calculator rather than the balances.
What can be consolidated
| Debt type | Usually worth consolidating? |
|---|---|
| Business credit card balance carried month to month | Yes, almost always. This is the most expensive debt most companies hold and the only one with no end date |
| Merchant cash advances, especially more than one | Yes, where the daily or weekly sweep is the problem. Check the settlement figure carefully, as the factor rate is often payable in full |
| Short term loans of 3 to 12 months | Often, where several are running at once or the term is too short for the purpose the money was used for |
| Business overdraft, at or near the limit | Sometimes. Clearing an overdraft into a term loan frees the overdraft for its actual job. It only works if the business then stops using it as permanent funding |
| Existing term loans at a lower rate | Usually not. Leave cheap debt alone and consolidate around it |
| Asset finance agreements | Rarely worth folding into an unsecured loan, because the asset is securing a cheaper rate. Asset refinance is usually the better route if you need to release cash |
| VAT, PAYE or corporation tax arrears | Possible with some lenders, but a Time to Pay arrangement with HMRC is often cheaper. Take advice before refinancing tax debt |
| Director loan accounts | No. That is an accounting and tax question, not a lending one. Speak to your accountant |
Business credit card consolidation
Business credit card consolidation means taking a term loan and using it to clear a card balance in one go, so that instead of a balance with no end date you have a fixed payment and a date the debt disappears. It is the most common consolidation we arrange, and the one where the arithmetic is usually most obviously in the company’s favour.
A business credit card is a good product used the way it is designed to be used. You spend, you clear the balance in full by the due date, you pay no interest, and on most cards you earn something back. Used that way there is nothing to consolidate and no reason to. The trouble starts when a balance stops being cleared. At that point the card is still priced as a short term convenience but is being used as long term funding, and the two do not fit. A card has no end date, no amortisation and no requirement to reduce the balance beyond a small minimum payment. A business can pay a card every month for three years and owe exactly what it owed at the start.
The test to run on your own card
- Find the interest rate on your most recent statement. Some providers show it as a monthly rate and some as an APR. If it is monthly, multiply by twelve for a rough annual figure, and be aware the compounded figure is higher still.
- Multiply your balance by that annual rate. That is what the card costs you a year if the balance does not move.
- Compare it against the monthly payment on a term loan of the same amount. If the loan payment is lower than the interest alone on the card, the card is costing you more per month to stand still than the loan would cost to clear the debt entirely.
We are not going to quote a competitor’s rate here, because rates are set per customer and the only one that matters is the one on your statement. Read it and do the arithmetic.
One thing worth knowing about business cards specifically. Business credit cards to limited companies are not consumer credit and do not carry the protections a personal card does, which is part of why the rates can be higher. Most also sit behind a personal guarantee from a director, so the balance is a personal exposure as well as a company one.
Consolidating a Capital on Tap balance
Capital on Tap is the card we are asked about most often, so it is worth dealing with directly. The same reasoning applies to any business credit card, including American Express, Barclaycard and the cards issued by the high street banks. The provider is not the issue. Carrying a balance is.
We are not connected to Capital on Tap. Bolton Business Finance Ltd is an independent commercial finance broker and is not affiliated with, endorsed by or appointed by New Wave Capital Limited, which trades as Capital on Tap. We cannot apply on your behalf, appeal a decision, change a limit or alter a rate on your card account. Capital on Tap is named here only because it is the card our clients most often hold. Capital On Tap is a registered trade mark of New Wave Capital Limited.
Taken on its own terms the card is a reasonable product. Capital on Tap publish rates from 13.86% APR (variable), credit limits up to £250,000, no annual fee, 1% cashback, and up to 42 days of interest free credit on purchases where the balance is paid in full and on time. Those figures were checked on their published benefits page on 20 September 2026. If you clear the card every month, none of what follows applies to you and there is nothing to consolidate.
The picture changes once a balance is carried. The rate you pay is set for your business rather than published, so the only number that matters is the one printed on your own statement. We are not going to guess it here. What we will say is that the headline rate is the rate offered to the strongest applicants, and a company that has carried a balance for a year is not usually being charged it.
Three things about the card that matter for consolidation
- Everyone holding one is a company. Capital on Tap’s published eligibility covers active directors and majority shareholders of private limited companies, LLPs and PLCs registered in the UK. Sole traders are not eligible. That means a Capital on Tap balance always sits with a body corporate, so the £25,000 regulated credit threshold never applies and we can arrange a consolidation facility at any size.
- There is no minimum trading history to get the card. That is a genuine benefit when you are starting out, and it also means a good number of card holders are young companies with thin filed accounts. That affects which lenders will look at a consolidation loan, which is a matter of picking the right funder rather than a barrier.
- The limit can be large. Published limits run to £250,000. A balance of that size carried at a card rate is not a card problem any more, it is a funding structure problem, and it is normally cheaper to refinance it secured against property than unsecured.
What we do is straightforward. You give us the current balance and the settlement figure, the rate from your statement and the last three to six months of business bank statements. We come back with what the market will do on a term loan of that size, and you compare the monthly payment on the loan against the interest alone on the card. If the loan does not win, we will tell you to leave the card where it is.
One practical point on the other side. Clearing a card with a loan and then running the card straight back up leaves the business with both, which is how this most often goes wrong. Most lenders will want to know what happens to the card limit after settlement, and it is a fair question to have an answer to.
Stacked merchant cash advances
The other case we see repeatedly is a business running two, three or four merchant cash advances at the same time. Each one takes a percentage of daily card settlements. Individually each is manageable. Together they can take a third or more of every day’s takings before the business sees a penny, which is when a profitable company starts missing supplier payments.
Consolidating stacked advances into a term loan converts a daily sweep into a fixed monthly payment, which is usually the whole point. Two warnings. First, the settlement figure on an advance is often the full factor amount rather than a pro rata balance, so early settlement saves less than people expect. Get it in writing. Second, a lender looking at a company with three live advances will see a business that has been funding itself expensively, and will price accordingly. Both are reasons to do it sooner rather than after a fourth.
Worked example
A limited company carrying £30,000 on a business credit card. The balance has been carried for over a year and is not moving. The statement shows a rate of 4% a month, which is roughly 48% a year simple and over 60% once compounding is taken into account.
| Route | Monthly | Where the debt is in 3 years |
|---|---|---|
| Do nothing, pay interest only | £1,200 | Still £30,000, having paid about £43,200 in interest |
| Consolidate to a 3 year loan at 12.9% APR | About £1,009 | Cleared, total interest about £6,338 |
| Consolidate to a 3 year loan at 18.9% APR | About £1,098 | Cleared, total interest about £9,535 |
The figure that matters is in the middle column. Both consolidation routes cost less per month than paying the interest alone on the card, and at the end of three years the debt is gone rather than sitting exactly where it started. That holds even on the higher of the two rates, which is the point worth taking away: a business with an impaired credit profile still comes out ahead here, because the comparison is not against a good rate, it is against an open ended one.
Figures are illustrative, reviewed September 2026, and are not an offer or a quotation. The 4% monthly rate is used as an example input, not as a published rate of any provider. Put your own numbers into the business debt consolidation calculator or the business loan calculator.
When it works and when it does not
Consolidation usually works when
- The debt being replaced is a credit card balance, a merchant cash advance or a short term facility, and the new facility is meaningfully cheaper.
- The business is trading profitably and the problem is the shape of the debt rather than the amount of it.
- The reason the debt built up has been dealt with. A one off VAT bill or a bad year that has passed is a different case to a business that loses money every month.
- You have settlement figures, not balances, and the arithmetic still works once early repayment charges are included.
- There is enough security or trading history to get a rate that beats what you are on.
Consolidation is the wrong answer when
- The business is loss making and the debt is growing. A new facility funds a few more months and makes the eventual position worse. This is the situation where consolidation does real damage.
- The only gain is a lower monthly payment achieved by stretching the term. Run the total cost. Six facilities over eighteen months turned into one over five years almost always costs more.
- The existing debt is already cheap. Leave it.
- The company is likely to run the cards and overdrafts straight back up. Consolidating and then re-borrowing leaves the business with both, which is the most common way this goes wrong.
- The debt is mostly HMRC arrears. Talk to HMRC about Time to Pay first.
If the business is in genuine difficulty, borrowing is not the answer. We arrange finance, we do not give debt advice. If the company cannot service its existing debt at any realistic price, speak to a licensed insolvency practitioner or get free impartial help from Business Debtline. We would rather point you there than put a facility in front of a business it will not help.
What it costs
Pricing on a consolidation facility works exactly as it does on any other business loan. It is driven by the company’s trading history, the filed accounts, the credit profile of the business and its directors, and whether there is security.
| Route | Typical rate | Notes |
|---|---|---|
| Unsecured term loan | From around 6.9% per annum | Fastest route and the usual answer for a credit card balance. 1 to 7 years. Personal guarantee usually required. Rate rises sharply where credit is impaired |
| Secured on property | From around 4% per annum | Cheapest option for larger sums. Up to 10 years. Takes 2 to 6 weeks and involves valuation and legal costs |
| Invoice finance | A service fee plus a discount charge | Where the debt built up because customers pay on 60 or 90 day terms, this fixes the cause rather than the symptom |
Watch the arrangement fee and the early repayment terms on the new facility as closely as the rate. A one off fee of 3% on a £100,000 facility is £3,000, which moves the real cost more than a point on the headline rate does. And if there is any chance of repaying early, an open ended early repayment charge can undo the whole exercise.
Where credit is impaired, expect a higher rate rather than a refusal. There is more on how different adverse entries affect pricing on business loans for bad credit.
Eligibility
Minimum criteria across our panel
- A UK limited company or LLP. Sole traders and partnerships of two or three people only where the credit exceeds £25,000 and is wholly or predominantly for business purposes.
- Twelve months of filed accounts opens most of the market. Six months of trading is the practical floor and only a handful of funders will look at it.
- The business must be able to service the new payment from current trading, not from the facility itself.
- Poor personal or business credit considered. Undischarged bankruptcy and live insolvency proceedings are not.
- Most unsecured lenders will ask at least one director for a personal guarantee.
- Secured consolidation needs property with enough equity, owned by the company or by a director willing to charge it.
What we need to look at it: a list of every facility with the lender, the current balance, the settlement figure, the monthly payment and the end date, your last three to six months of business bank statements, your most recent filed accounts with management figures if those accounts are more than nine months old, and directors’ names, dates of birth and home addresses for the last three years.
The settlement figures are the part people skip and the part that decides the answer. Ask each lender for a figure valid for at least fourteen days.
How to apply
Send us the list of facilities and the settlement figures and we will come back the same day with what the market will realistically do and whether it is worth doing at all. There is no broker fee on unsecured business loans, the lender pays us, and there is no obligation to proceed.
Tell us what you are carrying
List what you owe, to whom, and what each one costs a month. We will tell you whether consolidating saves money or just moves it around. If the answer is that you should leave things alone, that is what you will get.
Prefer to speak to someone? Call 0161 546 9128, Monday to Friday, 9am to 5pm. Or read the main business loan broker page for the full range of what we arrange.
Business debt consolidation questions answered
What is business debt consolidation?
Business debt consolidation is taking one new facility and using it to repay several existing business debts, so the company is left with a single payment to a single lender. The new facility is usually a term loan, sometimes secured against property. It does not reduce what is owed. It changes the price of the debt, the shape of the repayments and the number of lenders the business deals with. It works best where the debt being replaced is expensive and short term, such as a business credit card balance or stacked merchant cash advances.
What is the difference between business debt consolidation and business loan consolidation?
They describe the same process. Business loan consolidation usually refers to the narrower case where the debts being replaced are term loans, while business debt consolidation covers everything, including credit card balances, merchant cash advances, overdrafts and short term facilities. In practice the distinction matters because term loans are often the cheapest debt a company holds, so consolidating loans deserves more scrutiny than consolidating cards or advances. Frequently the right answer is partial: consolidate the expensive facilities and leave a cheap loan running.
Will consolidating reduce what I pay in total?
Only if the new rate is lower and the term is not stretched too far. A longer term at a lower rate can still cost more overall, because interest is paid for more months. The two numbers to compare are the total amount repayable under the existing facilities and the total amount repayable under the new one, both calculated from settlement figures rather than balances. If the total goes up, the only justification for doing it is that the business genuinely cannot meet the current payments.
Can I consolidate a business credit card balance into a loan?
Yes, and it is the most common reason companies come to us for consolidation. A card carried month to month has no end date and no requirement to reduce the balance beyond a minimum payment, so a business can pay it for years and owe what it started with. A term loan has a fixed end date and every payment reduces the debt. Read the rate off your statement, work out what the balance costs you a year if it does not move, and compare that against the monthly payment on a loan of the same amount.
Can I consolidate a Capital on Tap balance?
Yes. Bolton Business Finance is not affiliated with Capital on Tap and cannot act on your card account, but we can arrange a term loan that clears the balance and replaces it with a fixed monthly payment and an end date. Capital on Tap issue their card to private limited companies, LLPs and PLCs rather than sole traders, so a Capital on Tap balance always sits with a body corporate and we can act at any facility size. The card itself is a reasonable product when the balance is cleared monthly. The consolidation question only arises once a balance is being carried, because a card has no end date and no requirement to reduce the balance.
Can I consolidate multiple merchant cash advances?
Often yes, and converting a daily sweep on card takings into a fixed monthly payment is usually the point. Two things to check. The settlement figure on an advance is frequently the full factor amount rather than a pro rata balance, so settling early saves less than people expect. And a lender looking at a company running several live advances will price for that, so it is better done sooner than after taking another one. Get settlement figures in writing from each funder before running any numbers.
Can I consolidate business debt with bad credit?
Frequently, yes. What matters is how old the adverse entry is, whether it has been satisfied, and what recent trading looks like. Expect a higher rate rather than a refusal. That still often beats what is being replaced, because the comparison is usually against a credit card balance with no end date rather than against a good rate. Undischarged bankruptcy and live insolvency proceedings are a no across the market. Avoid applying directly to several lenders in a row, because a run of declines leaves a footprint that makes the next one more cautious.
Do I need security to consolidate business debt?
Not necessarily. Unsecured consolidation is available from around 6.9% per annum for strong established companies, usually against a director’s personal guarantee rather than a charge over property. Where the sum is larger, secured against property is materially cheaper, from around 4% per annum and over a longer term, but it takes two to six weeks and brings valuation and legal costs. Above roughly £100,000 the secured route is usually worth the wait.
I am a sole trader. Can you consolidate my business debt?
Only where the credit exceeds £25,000 and is wholly or predominantly for business purposes. Below that figure a credit agreement with a sole trader, or with a partnership of two or three people not all of which are companies, is a regulated credit agreement under article 60C of the Regulated Activities Order, and arranging one is a regulated activity. We are not authorised by the Financial Conduct Authority, so we cannot act. An FCA authorised lender or credit broker can. Limited companies and LLPs are not affected by this at any facility size.
Will consolidating affect my business credit score?
Usually positively over time, provided the new facility is paid on time and the old facilities are genuinely closed rather than left open and used again. Settling several accounts and running one well tends to read better than carrying multiple facilities at high utilisation. In the short term there will be a search and a new account on the file. The thing that damages a file is a run of applications to several lenders in quick succession, which is avoidable if the case is matched to funders whose criteria it fits before anything is submitted.
Do you give debt advice or deal with my existing lenders?
No. We arrange a new facility that repays existing ones. We do not give debt advice, we do not negotiate with creditors, and we do not run debt management plans. If a business cannot service its debt at any realistic price, consolidation is the wrong answer and we will say so rather than arrange something. Free impartial help is available from Business Debtline, and a licensed insolvency practitioner is the right person where the position is more serious.
About the author
Marcus Wright is the owner and founder of Bolton Business Finance Ltd. He has worked in financial services since 2008, beginning his career at Santander, and has been a commercial finance broker since March 2019.
He founded Bolton Business Finance in 2020 to give businesses access to the whole lending market rather than one bank’s own product range. The firm is a member of the National Association of Commercial Finance Brokers and works with a panel of 135+ lenders.
Marcus arranges commercial mortgages, bridging, development finance, business loans, asset finance, invoice finance and merchant cash advances. Call 0161 546 9128.
Bolton Business Finance Ltd is an independent commercial finance brokerage, not a lender and not a bank. We are not authorised or regulated by the Financial Conduct Authority and can only complete non-regulated introductions for business purposes. We cannot arrange regulated credit agreements, which includes business lending of £25,000 or less to a sole trader or to a partnership of two or three people. We do not provide debt advice, debt counselling or debt adjusting services. Figures on this page are illustrative and are not an offer or a quotation. Rates, terms and facility limits are set by the lender and subject to underwriting and status. Where a personal guarantee is given, personal assets may be at risk if the loan is not repaid. Consolidating existing debt may increase the total amount repayable and the period over which it is repaid. We may receive a commission from the lender we introduce you to. Registered address: Westgate House, 1 Westgate Avenue, Bolton, Greater Manchester, BL1 4RF. Company number 12495909.