Debt Consolidation For Businesses
The concern for the borrower is using hard earned equity to reduce short term debt, and thus reducing ones net worth. This may not really be a hard decision for a business owner to make that’s struggling and must reduce cost in order to survive. But for businesses that are doing ok this is definitly a harder call.
One potential solution is to select a commercial loan that allows the borrower to pay down the balance without incurring the prepayment penalties. So the borrower could take a portion or all of the cash flow savings and use that amount to hammer down the loan amount while still having the flexibility to use the extra cash for other purposes in tight months.
