A business debt consolidation loan can cover a range of unsecured business debts. But not everything qualifies. While you can use it for common operational debt, you can’t use this funding for secured loans like equipment financing, real estate mortgages, or any debt tied to specific collateral.

Let’s look at the business debt types that are eligible.

Business Credit Card Debt

Business credit cards often carry some of the highest interest rates in commercial lending. If you’re only making minimum payments to keep operations running, you could be stuck in a cycle where the balance barely budges, and a business debt consolidation loan can help you break free.

Consolidating high-interest business credit card debt into a loan with a lower rate means more of your monthly payment goes toward the principal—not just interest. That can add up to significant savings and help your business eliminate debt faster while improving cash flow.

Payroll Tax Debt

Falling behind on payroll taxes can quickly spiral into a serious problem for any business. The IRS and state agencies charge steep penalties and interest on unpaid payroll taxes, and they have powerful collection tools at their disposal.

By consolidating payroll tax debt into a structured repayment plan, you can avoid aggressive collection actions while making steady progress toward compliance. A predictable monthly payment also helps you budget more effectively and prevents future tax issues.

Outstanding Vendor Invoices

Unpaid vendor invoices can damage crucial supplier relationships and disrupt your supply chain. When you’re juggling multiple overdue accounts, vendors may put you on credit hold or demand cash on delivery, straining your working capital even further.

Consolidating vendor debt allows you to pay off suppliers immediately, potentially negotiating discounts for prompt payment. You’ll restore vendor relationships while converting multiple unpaid invoices into a single, manageable monthly payment.

Merchant Cash Advances

If your business has taken multiple merchant cash advances (MCAs), you know how quickly daily or weekly payments can drain your cash flow. MCAs often come with extremely high effective interest rates, and stacking multiple advances can cripple your business’s finances.

Consolidating MCAs into a traditional loan with fixed monthly payments can dramatically reduce your payment frequency and total cost of capital. This gives your business breathing room to focus on growth instead of just surviving the next automatic debit.

Short-Term Business Loans

Multiple short-term loans with different rates, terms, and payment schedules can be overwhelming to manage. If your business’s financial position has improved since you first borrowed, consolidating into a new loan could mean better terms and a lower rate.

You’ll want to ensure that the new rate and terms actually improve your cash flow, but if they do, consolidation can help you pay off those loans more efficiently while simplifying your financial management.