Frequently Asked Questions

Neither in the way those words are usually used. Finance Business Debt is an information website. We explain business debt and finance options and, where appropriate and at your request, may introduce you to third-party finance providers or specialist advisers. We do not lend, we do not give regulated financial advice and we are not party to any agreement you enter into. Our regulatory information page sets out our status.

No. Reading the site, using the tools and making an enquiry are free, and an enquiry places you under no obligation. Any fee a finance provider or adviser intends to charge you must be set out by them before you commit. We will not charge you for an introduction.

Where we introduce a business to a finance provider or adviser and that business goes on to take out a facility or engage the adviser, we may receive a commission or fee from that third party. The basis of any such arrangement is disclosed on our regulatory information page and again before any introduction is made.

No. An enquiry with us is a conversation and does not involve a credit search. If you later choose to apply to a finance provider, that provider will carry out its own checks, which usually include a credit search on the business and often on its directors. The provider should tell you whether the search is soft or hard before it runs one.

We use the details you give us to understand your situation and explain the options that may be relevant. We share them with a third-party provider or adviser only when you ask us to make an introduction. Our privacy policy explains the lawful basis for processing, how long enquiry data is kept and how to ask for it to be deleted.

Business debt consolidation combines two or more existing business debts into one new facility, which is used to repay them. The old agreements are closed and the business is left with a single repayment, rate and end date. Our business debt consolidation page explains the process, which debts may qualify and what to weigh up before you proceed.

Most unsecured commitments can be included, subject to the new provider's criteria: term loans, business credit cards, overdrafts, merchant cash advances, revolving credit and some trade arrears where the supplier agrees. Secured borrowing such as hire purchase or a commercial mortgage can sometimes be included but is often cheaper left where it is. HMRC arrears are a special case covered on our HMRC tax debt page.

Not automatically. Consolidation often lowers the monthly payment, but if the new term is longer the total repaid can be higher even at a lower rate. Arrangement fees and early repayment charges on the old facilities add to the cost. The debt comparison tool lets you test the total cost of different rates and terms against your current borrowing.

In principle yes, but think carefully. The interest rate on a government-backed scheme loan is often lower than any replacement, so including it in a consolidation may increase your overall cost. Check the settlement terms and compare the total repaid over the full term before deciding. Our guide on whether you can consolidate multiple business loans covers this.

Refinancing replaces one existing agreement with a new one on different terms, such as a different rate, term, security or repayment profile. Consolidation replaces several debts with one. A business with a single expensive loan refinances; a business juggling several facilities consolidates. Our article on consolidation versus refinancing explains how to tell which you need.

Usually when something has changed since you borrowed: the business is stronger and may qualify for better terms, the original facility was expensive short-term finance, or the repayment profile no longer fits the way cash moves through the business. Refinancing rarely makes sense if break costs and fees outweigh the saving. See business loan refinancing for the detail.

Sometimes. Some providers work with businesses that have past credit problems, usually at a higher cost or against security such as property or assets. Recent missed payments, County Court judgments or unpaid HMRC liabilities narrow the options considerably. Be cautious of expensive offers that solve a short-term problem by creating a longer one. Our guide Can a business refinance with bad credit? goes further.

Each provider sets its own criteria. Most look for a UK-registered business with a trading history, often one to two years, that can show through accounts and bank statements that the new repayment is affordable. Limited companies, LLPs, partnerships and sole traders can all apply, although some providers only work with incorporated businesses. Agreements of £25,000 or less with sole traders and small partnerships are regulated consumer credit.

Typically three to six months of business bank statements, the latest filed accounts and sometimes management accounts, a schedule of existing borrowing with settlement figures, identification for directors or owners and details of any security offered. Our guide to the documents needed to refinance business debt explains why each item is requested.

For unsecured lending to a limited company, almost always. A personal guarantee means that if the company cannot repay, the lender can pursue the guarantor personally. Secured facilities may rely on the asset instead, or ask for both. Read the guarantee carefully and consider independent legal advice before signing. Our personal guarantees page explains the implications.

Interest, arrangement or facility fees, early repayment charges on the facilities being cleared, valuation and legal fees where security is taken, and any broker or introducer fees. Then compare the total repaid over the full term, not just the monthly figure. Our article on how to compare business finance offers sets out a method.

A longer term increasing the total repaid, fees and break costs eating the saving, new security putting property or assets at risk, a personal guarantee exposing personal assets, and freed-up credit lines being used again so that the business ends up with more debt than before. Our guide to the risks of consolidating business debt covers each one.

Usually not when measured over a year. A merchant cash advance is repaid through a percentage of card takings and priced with a factor rate, which is a multiplier on the amount advanced rather than an annual percentage rate. Repaid quickly, the equivalent annual cost can be high. Our merchant cash advance debt page explains how to compare it fairly.

Contact HMRC before the payment is missed. HMRC can agree a Time to Pay arrangement, which spreads the liability over instalments, although interest continues to accrue. GOV.UK explains how to get in touch. Borrowing to clear tax arrears is sometimes possible but should be compared against Time to Pay first. See our HMRC tax debt page.

Lenders will usually contact the business about arrears, may add charges and can eventually enforce security or call on a personal guarantee. A company that cannot pay its debts as they fall due may be insolvent, and its directors may have duties to creditors to consider. Our article on what happens when a business cannot repay its loans explains the stages and the options at each.

Business Debtline provides free, impartial debt advice to the self-employed and small businesses in England, Wales and Scotland. Where a formal insolvency procedure such as a CVA, administration or liquidation may be needed, only a licensed insolvency practitioner can act. Finance Business Debt does not provide insolvency, HMRC or legal services. Our business debt help section explains when each route applies.