Smaller loans can start to add up, especially if you’ve taken out multiple loans around the same time. Managing them is complicated, and soon you might start wrestling with who gets paid what and when, and what loan has which kind of interest rate. A business consolidation loan takes the headaches out of managing your small business loans.
The first reason is primarily to make your life easier. If your business regularly uses short-term business loans to bridge gaps in cash flow and revenue, then having multiple loans open at the same time can cause some serious confusion. Using business debt consolidation can ease the management of all these smaller loans by combining them into a single loan.
The second one, and perhaps the one that is more significant for business owners who want to maximize their income while minimizing expenditures, is reducing overall costs associated with those loans. Depending on the interest rates and terms of any given loan, it might actually save a business serious money by consolidating. With a lower interest rate tied to a single balance, you can cut costs down while still paying off your business debt.
Consolidation loans from Commerce Capital Funding are still just as flexible as fixed-term business loans. Fast and flexible funds are available for consolidating your startup loans and minimizing your overhead.
Some experts might recommend a bank loan or SBA loan to help consolidate debt. But with either of these options, you may be facing upfront application fees, extensive review periods, appraisal costs, and overall lower success rates.
For example, a consolidation loan from the SBA of up to $350,000 is around 11%. That's on top of a 2% referral fee, a 2% packaging fee, and up to a 4% fee to guarantee the loan.
So, if you consolidate with the SBA on a series of small loans adding up to around $150,000, you'll end up paying
(Referral Fee = $3,000) + (Packaging Fee = $3,000) + (Guarantee Fee = $3,000) = $9,000
That's just to apply and get approved for the loan itself! Not to mention the additional interest you pay over that, the time you have to wait for your approval, and the necessity for nearly impeccable credit.
Whether either of those options is best depends on your business. Call us and we can help you decide what the right option is for you.
Save money and manage complicated funding with a consolidation loan from Commerce Capital Funding.