Consolidating business debt almost always cuts the monthly payment. That is not the same as costing less. This works out what you are really paying across your existing facilities, what a single new loan would cost, and which of your debts are actually worth refinancing.
Business debt consolidation calculator
Enter each existing facility using its settlement figure rather than its balance. Nothing is sent anywhere and nothing is stored.
1. What you owe now
Debt 1
Debt 2
Debt 3
2. The consolidation loan
Which debts are worth refinancing
Use the settlement figure, not the balance
This is the single most common error in a consolidation sum. Your statement balance is not what it costs to clear the debt today. On a reducing balance loan the settlement figure is usually lower, because you are rebated interest you have not yet accrued. On a merchant cash advance it is usually the whole of the remaining agreed repayment, because the cost was fixed at the outset and paying faster saves you nothing. On asset finance it can be higher than you expect once the early termination sum and any fees are added.
Ring each lender and ask for a written settlement figure before you take any of this seriously. Every output on this page depends on those numbers being right.
A lower monthly payment usually costs more
Consolidating six facilities with an average of two years left into one loan over five years will cut the monthly outgoing sharply. It will also keep you in debt for three years longer, and interest is charged for every one of those months. The calculator shows both numbers side by side because only one of them tends to get mentioned in a sales conversation.
That does not make consolidation wrong. Freeing up several thousand pounds a month of cash flow can be exactly what a business needs, and paying more in total for it can be a perfectly rational trade. It only becomes a mistake when nobody tells you that is the trade you made. Shorten the new term in the calculator and watch the extra cost fall away.
The fair test is rate against rate
Comparing total cost across different terms is not like for like, so the calculator works out the blended annual rate you are paying across your existing facilities and puts it next to the illustrative rate on the new loan. That is the comparison that holds regardless of term. If the new rate is meaningfully below your blended rate, consolidating is genuinely cheaper money and the higher total is purely the effect of borrowing it for longer. If the new rate is above your blended rate, you are paying more per pound as well as for longer.
The blended figure is derived from the settlement figures and the payments you are actually making, so it captures what your debt really costs rather than what the original agreements said.
Do not consolidate everything by default
Most businesses carrying several facilities have one or two that are genuinely expensive and one or two that are cheap. Asset finance written two years ago at a low flat rate, or a director loan at nothing, will look worse after refinancing, not better. Folding cheap debt into a more expensive loan to tidy up the admin is a real and avoidable cost.
The table works out the implied annual rate on each facility from its settlement figure and its payments, then marks it against the new loan. Refinance the ones above the line and leave the ones below it where they are. A partial consolidation is often the right answer and is rarely the one offered.
Facilities that do not settle cleanly
A merchant cash advance has its cost baked into a factor rate at the outset, so early settlement generally saves nothing at all unless the funder offers a discretionary discount. Ask for a payoff figure in writing and ask specifically whether any of the fixed cost falls away.
Asset finance and leases carry an early termination sum rather than a simple balance, and on a lease you may not own the asset, so you cannot always clear the agreement and keep the equipment.
Invoice finance is a service contract with a notice period, not a loan you can repay. Unwinding the ledger takes time and the notice runs whether you use the facility or not.
HMRC arrears may be cheaper left on a Time to Pay arrangement than refinanced commercially, and lenders take a dim view of borrowing to pay off tax debt. Speak to HMRC before assuming it needs refinancing.
Director loans have tax consequences on both sides that no finance calculation captures. Involve your accountant before moving one.
Secured usually beats unsecured for larger sums
Consolidating a substantial amount over a longer term is normally only available with security, most often a charge over trading premises or investment property. That brings the rate down considerably and makes the longer term affordable, at the cost of putting an asset on the line for what was previously unsecured borrowing. If property is available, our commercial mortgage affordability calculator will show what a secured facility could support.
What this does not include
- Whether any lender will actually refinance the debts you have listed. Existing arrears, recent defaults and multiple advances all affect that.
- Personal guarantees on the facilities being cleared, and whether they are formally released.
- Tax treatment of any of it.
- The risk of running the cleared cards and overdrafts straight back up, which is the most common reason consolidation fails.
- Variable rates on either side of the comparison.
Get the refinance tested properly
Refinancing several facilities into one is one of the harder things to place, because a lender is looking at why the debt built up as much as at the numbers. We deal with that across the market rather than one lender at a time. Send us the settlement figures and we will tell you what is realistically available and whether it is worth doing.
To price a single new facility on its own, use our business loan calculator, or see all our other calculators.
This calculator is provided for illustration and general information only. It is not financial, tax or legal advice, not a quotation, and not an offer of finance. Every figure depends on the settlement figures and terms you enter, and the annual rates shown are illustrative comparisons rather than lender figures. Bolton Business Finance Ltd is a commercial finance broker and not a lender, and is not authorised or regulated by the Financial Conduct Authority. We arrange non-regulated, business purpose commercial finance only, meaning lending to limited companies, and to sole traders and partnerships where the facility exceeds £25,000 and is wholly or predominantly for the purposes of their business. We do not arrange regulated consumer credit or personal debt consolidation. If your business is in financial distress, speak to a licensed insolvency practitioner or a free debt advice service before taking on further borrowing.