Small business refinance replaces an existing loan, line of credit, or MCA with a new product at better terms — lower rate, longer repayment, or simplified payments. The four main paths are bank-tier refinance, SBA 7(a) refinance, debt-consolidation loan, and private lender refinance; each suits a different credit profile and urgency level.
Rate reduction is the most common driver: replacing an MCA effective APR of 60–150% with an SBA 7(a) rate of 9–15% saves thousands per month on a $200K debt. The other four drivers are: (1) term extension — stretching a 12-month MCA into a 5-year term loan lowers the monthly payment even without a rate drop; (2) debt consolidation — replacing 3–4 separate monthly obligations with one payment simplifies cash-flow management; (3) removing a personal guarantee — some established businesses can refinance into unsecured or business-only collateral structures once credit history is established; (4) switching to SBA-backed pricing — SBA guarantees allow community banks to offer below-market rates to borrowers who don't qualify for conventional credit alone.
Conventional banks offer the lowest rates (7–12% APR) for businesses with 700+ FICO, 3+ years of operating history, clean financials, and collateral. Banks rarely offer a standalone refinance of MCAs without collateral. Best suited for businesses with real estate, equipment, or significant AR to pledge. Application typically requires two years of business tax returns, current P&L, and a debt schedule showing all current obligations.
The SBA 7(a) program explicitly permits loan proceeds to retire existing business debt — including high-cost MCAs — when the refinance provides a 'clear benefit' to the borrower. Rates are prime + 2.25–4.75% (per SBA SOP 50-10-7); terms up to 10 years for working capital and 25 years for real estate. Minimum requirements: 680+ FICO, 2+ years in business, ability to document the debt being retired, and DSCR ≥ 1.25x post-refinance. Payoff letters from all existing lenders are required at closing.
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Debt consolidation loans from online and specialty lenders work at 650+ FICO and 1+ year in business. Rates typically 18–40% APR — higher than bank or SBA but far below stacked MCAs. The single payment structure reduces administrative burden and makes cash-flow forecasting predictable. Lenders require a full debt schedule and verify that post-consolidation DSCR exceeds 1.25x. Loan amounts typically $50K–$500K.
Private and alternative lenders offer bridge-refinance products for businesses that can't yet qualify for bank or SBA pricing: 550+ FICO, 6+ months in business, and verifiable monthly revenue. Rates are higher (30–60% APR) but the approval window is shorter and documentation lighter. Appropriate as a transitional step — use a private refinance to exit a stack of MCAs, stabilize cash flow for 6–12 months, then refinance again into SBA pricing once the credit profile recovers.
Start. Your file routes to ONE matched lender — matched to your current debt profile, FICO, and refinance goal. ClearValue Lending is a funding platform, not a lender or financial advisor.