Also called: Consolidation loan
Debt consolidation
Debt consolidation is combining several existing debts into a single facility with one repayment. In business lending it commonly rolls together short-term loans, merchant advances, equipment contracts and sometimes tax debt.
What is a debt consolidation?
Debt consolidation is combining several existing debts into a single facility with one repayment. In business lending it commonly rolls together short-term loans, merchant advances, equipment contracts and sometimes tax debt.
Example
Four facilities costing $9,400 a month are consolidated into one loan at $5,800 a month over a longer term.
Why it matters
The monthly relief is real, but a longer term usually means more total interest, so compare total cost as well as the repayment.