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Best business loans for debt consolidation in 2026
The best loan for consolidating business debt is the one with the lowest rate and longest term you can qualify for: an SBA 7(a) loan first, then a bank term loan, then an online term loan. Consolidation only helps if the new loan lowers your total cost or frees enough monthly cash to matter. Check for prepayment penalties on the debts being paid off.
By the WithFunded team · Published November 11, 2026 · Rates as of November 2026
The short list
- Best for lowest rate and longest term
- SBA 7(a) loan
- Best for strong credit
- Bank term loan
- Best when you need it done quickly
- Online term loan
- Best low-rate option for homeowners
- Home equity line of credit
The 4 best options, ranked
1. SBA 7(a) loan Best for lowest rate and longest term
SBA 7(a) loans can refinance qualifying business debt. Replacing several short, expensive loans with one long, capped-rate loan cuts the monthly outlay sharply.
Watch for: Heavy documentation, and the timeline rules it out for anything urgent. SBA loan guide →
2. Bank term loan Best for strong credit
A business with good financials can roll its debts into a conventional term loan at bank rates, usually faster than an SBA loan.
Watch for: The slowest route outside SBA and the hardest to qualify for. Term loan guide →
3. Online term loan Best when you need it done quickly
An online term loan can replace daily or weekly payments with one monthly payment within days. The rate must be lower than what it pays off.
Watch for: A longer term lowers the payment but raises the total interest you pay. Term loan guide →
4. Home equity line of credit Best low-rate option for homeowners
Home equity is cheap and can clear expensive business debt. It moves the risk from the business to your house.
Watch for: Your home is the collateral, even though the money funds the business. HELOC guide →
Side-by-side comparison
| Option | Verdict | Cost basis | Funding speed | Qualifies on |
|---|---|---|---|---|
| SBA 7(a) loan | Best for lowest rate and longest term | Capped at 10.00%–13.50% by loan size (prime plus the SBA maximum spread) | Weeks to months | Generally stronger credit and two or more years in business |
| Bank term loan | Best for strong credit | About 7% median on new small-business term loans (Kansas City Fed, Q4 2025) | Weeks | Strong credit, established financials, often collateral |
| Online term loan | Best when you need it done quickly | Representative 8%–30% APR, fixed payments over 6 to 60 months | Days | Revenue, time in business, and credit |
| Home equity line of credit | Best low-rate option for homeowners | Typically prime (7.00%) plus a lender margin | Slower than unsecured options: expect an appraisal and title work | Your home equity and personal credit |
What it costs
Monthly payments on a standard fixed-payment loan at the representative 8%–30% APR band. The low end of each range is 8% APR and the high end is 30% APR.
| Amount | 36 mo | 60 mo | 84 mo |
|---|---|---|---|
| $50,000 | $1,567–$2,123 | $1,014–$1,618 | $779–$1,430 |
| $150,000 | $4,700–$6,368 | $3,041–$4,853 | $2,338–$4,289 |
| $300,000 | $9,401–$12,735 | $6,083–$9,706 | $4,676–$8,578 |
Financing $150,000 over 60 months costs about $3,041–$4,853 a month, or $32,488 to $141,181 in total interest, depending on the rate you qualify for. WithFunded calculation, representative 8%–30% APR band. Not a quote.
SBA 7(a) rates are capped at prime plus a maximum spread that shrinks as the loan grows. At the current 7.00% prime rate, these are the highest payments a lender could charge on a 10-year term:
| Loan amount | Maximum rate | Monthly payment at the maximum |
|---|---|---|
| $150,000 | 13.00% | $2,240 |
| $350,000 | 11.50% | $4,921 |
| $700,000 | 10.00% | $9,251 |
Payments at the SBA maximum variable rate for each size tier. Many borrowers qualify below the maximum. Source for rate caps: U.S. Small Business Administration. WithFunded calculation.
What lenders look at
- A schedule of every debt: balance, payment, rate, and payoff amount.
- Whether the business is current on those debts.
- Cash flow after the proposed consolidation.
Mistakes to avoid
- Consolidating and then borrowing again on the lines you just paid off.
- Extending the term so far that the total interest paid goes up, without a cash flow reason to do it.
Frequently asked questions
- Can you consolidate business loans?
- Yes. A new loan pays off the existing ones and leaves a single payment. It is worthwhile when the new loan has a lower cost or a payment the business can carry comfortably.
- Can an SBA loan refinance existing business debt?
- Yes, for debt that meets SBA requirements. Lenders must show the refinance benefits the business. Some debt types are restricted, so ask an SBA lender.
- Does consolidation hurt my credit?
- A new loan adds an inquiry and an account, a small short-term effect. Paying down several balances and making one payment on time usually helps over the following months.
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How we ranked these options
This guide ranks types of financing, not individual lenders. Each option is ordered by how well it fits the need described on this page, judged on four things in this order: whether the structure matches how the money will be used and repaid, total cost, funding speed, and how hard it is to qualify. Cost figures are WithFunded calculations from published rate inputs as of November 2026: the bank prime loan rate from the Federal Reserve, the SBA maximum-rate schedule, and Federal Reserve survey data. The method follows our 2026 SMB Financing Cost Report, whose own figures use June 2026 rates.
WithFunded is a financing marketplace, not a lender. Our 2-minute form suggests a product type from the families we cover, and a funding partner reviews the request. Not every structure named in this guide is available through WithFunded: options such as SBA microloans, USDA farm loans, bank loans, and seller financing are ones you would pursue directly with the provider. They are listed because leaving out a good fit would make the ranking less useful.
Related guides
The top-ranked option on this page is SBA 7(a) loan because it fits the most common version of this need. Your own best fit depends on your revenue, time in business, credit, and how fast you need the money.
Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.