How to consolidate your business's debt
Whether you’ve just launched your new business, are a few years into the journey, or have a well-established and mature business, cash flow isn’t always a constant. As a business owner, you’re familiar with the unexpected costs that arise within your company, like purchasing new property or replacing older equipment.
Sometimes, you may not have the cash on hand to pay for the costly and unanticipated expenses that come with owning your own business. In these cases, you might take out a business loan to cover such costs.
However, in instances where you’ve taken out multiple business loans at the same time, it can become challenging to manage several due dates, interest rates, and balances in addition to operating your business.
If you’re juggling multiple loan payments and managing your business, then you may want to consider a new approach to consolidate debt.
How does debt consolidation work?
Business debt consolidation allows you to take out a new loan to pay off all other existing business debt and loans. Instead of tracking multiple loans, move all current debt accounts and loans into one convenient and streamlined monthly payment.
In most cases, business debt consolidation works similarly to personal debt consolidation. When looking for business debt consolidations loans, you’ll want to consider the following:
- Interest rate: To have complete control over the consolidation, you’ll want to find a loan that offers a similar or lower interest rate than what you currently are paying with existing debt.
- Loan maximum: To cover all outstanding debts, you’ll need to ensure that the loan covers the entirety of debt you have — for example, if you have $60,000 in business debt, the loan should cover $60,000. If it does not, you may want to consider finding a loan with a higher maximum.
What are the advantages of business debt consolidation?
Beyond giving you more time to focus on your business, debt consolidation offers many advantages, including:
- Simplified payments: Instead of keeping track of multiple loan payments and debt, you can streamline them into one simple monthly payment.
- Boosted cash flow: In some cases, you may receive a lower interest rate on your consolidated loans. In this instance, you’ll be able to keep more money in your business each month to optimize your operations.
- Improved credit score: If managing multiple loans and making payments on time presents challenges for you, a single loan payment can help improve your overall credit score.
It’s the right time to consolidate your business’s debt
Here at Westfield Bank, we readily offer access to cash and flexible loan terms that promote business longevity throughout times of growth or change, while preparing your business for its future. Our variety of loan and credit options provide working capital and improve cash flow to keep your business moving along its journey. In doing so, we understand your need for debt consolidation, and we’re here to help.