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Debt consolidation is a quick and easy way to get on track with your finances and reduce your overall monthly payments. It is the process of grouping multiple debts into a single loan, with the end goal to reduce the total payments due. By combing a number of loans with different interest rates, terms, balances and repayments, you can create one easy to manage monthly payment and streamline your financial processing. In some cases, there is even the potential to access lower interest rates, resulting in lower repayments over time.
- Reduce interest rates and monthly repayments. By consolidating smaller debts into a single larger loan, you may qualify for lower interest rates or a longer loan term. Consequently, your monthly payments will decrease and you will have more cash available to run your business or invest in other activities.
- Improve cash flow. Having debt split across several lenders and products can lead to difficulties in account reconciliation. You and your team can easily waste hours preparing payments and analysing cash flow. Consolidating all loans into a single repayment means your repayment schedule is simple and predictable, with better cash flow as a result of the lower monthly payment.
- Borrow additional funds. When small businesses are approved for consolidation financing, they may qualify for additional borrowing as a result of the lower debt to service coverage ratio (ie. the difference between your repayment commitments and monthly net revenue). This frees up working capital that can be used to grow the business or for essential purchases such as equipment and stock.
When to consolidate your business loans
The best time to consolidate your business loans really depends on your unique circumstances. Generally, if you have a good personal credit history and solid business financials you can apply for a debt consolidation loan at any time. However, if you have taken out a series of short term loans to cover business expenses and gaps in cash flow, you will need to show about six months of positive revenue trends to maximise your chance of approval.
No matter your current situation, the business loan specialists at Speedy Finance can help develop a long-term strategy to ensure you receive the most appropriate financial products to suit the goals of your business.
How to consolidate your business loans
At Speedy Finance, we have many years of experience helping Australian businesses to reduce their overall debt and improve cash flow through debt consolidation. Our flexible lending solutions are suitable for businesses big and small, and our specialists will work with you directly to streamline your finances.
The steps to apply for a debt consolidation are simple. You can simply apply online or contact a Speedy Finance adviser to talk through how our products will help you meet your goals.
After you contact us, we may request a meeting or call to understand your current financial position. At this stage, we will look at your existing credit facilities and assess whether a restructure or consolidation is appropriate for your circumstances. We will then assist with your application where necessary to help fast-track the loan approval.
Contact Speedy Finance today to find out exactly how debt consolidation could benefit your business.