It usually starts with one quick online loan to get through a slow patch. Then a second one to cover the repayments on the first, a merchant cash advance against card takings, and a few supplier accounts that slip past 60 days. Before long, a big share of every day's sales is gone before you've paid wages, rent or IRD. Business debt consolidation breaks that cycle by replacing many expensive debts with one loan secured on property.
fundU is a direct New Zealand business lender. We lend $20,000 to $1m, secured on residential, commercial or industrial property, and we can pay your existing lenders and creditors out directly at settlement.
What is business debt consolidation?
Business debt consolidation means taking out one new loan to repay several existing business debts, leaving you with a single lender, a single set of terms and a single repayment arrangement. When it's done with property security, the new loan is often structured very differently from the debts it replaces.
The goal isn't just tidiness. It's to stop cash leaking out of the business every day, so you can pay your team, keep suppliers onside and plan ahead again. For many owners, refinancing business debt is the moment they stop firefighting and start running the business.
Which debts can be consolidated into one property-secured loan?
Most business-related debts can be rolled into a consolidation loan, provided there's enough equity in the property offered as security. The ones we see most often are:
- Daily or weekly repayment loans. Short-term online business loans that debit your account every business day or every week.
- Merchant cash advances. An advance repaid by a share of your card takings or a fixed daily sweep.
- Stacked loans. Two, three or more short-term loans taken out on top of each other.
- Overdue supplier and trade accounts. Creditors who've stopped extending credit or moved you to cash on delivery.
- IRD arrears. Overdue GST, PAYE, provisional tax or terminal tax. IRD charges a late payment penalty the day after the due date and a further penalty a week later, as well as interest, according to Inland Revenue. Our IRD tax debt loans page covers this in detail.
- Business credit cards and overdrafts that have crept up to their limits.
- Private loans from family, friends or former business partners who now want their money back.
- Overdue council rates on business premises.
Why do daily and weekly repayment loans hurt cash flow so much?
Because they take money out faster than most businesses earn it. A daily repayment loan pulls cash every business day regardless of whether it was a good day or a bad one, so a quiet week hits hard.
Short-term online loans often quote a fixed total repayment rather than an ongoing rate, which makes the true cost hard to compare. They also tend to have very short terms, so the repayments are a large chunk of the amount borrowed. When a second loan is taken to cover the first, the business is effectively borrowing to make repayments, and the hole gets deeper each round. This pattern, sometimes called loan stacking, is one of the most common reasons business owners call us.
Good to know: Before you consolidate, gather the latest statement or payout figure for every debt. Seeing the full list on one page is often the first time an owner realises how much is actually going out each week.
How is a merchant cash advance different, and can it be paid out?
A merchant cash advance isn't a traditional loan. The provider buys a slice of your future card sales and takes it back automatically from your takings, usually daily, until an agreed total is repaid.
That automatic sweep is what makes it painful. On a strong Saturday you might not notice, but in a slow winter month it can swallow the margin you needed for wages. Most advances can be settled by paying the remaining balance owed under the agreement. We ask the provider for a written payout figure, include it in your loan, and pay it at settlement so the deductions stop.
What changes when you consolidate business debt?
The main change is predictability. Instead of juggling multiple due dates and deductions, you have one lender and one arrangement you can plan around.
| Before consolidation | After a fundU consolidation loan | |
|---|---|---|
| Number of lenders and creditors | Often five or more | One |
| Repayment frequency | Daily and weekly debits | One arrangement, which may be interest-only or capitalised |
| Security | Mostly unsecured, personal guarantees | Secured on property you nominate |
| Term | Very short, often months | Short to medium term with a clear exit |
| Creditor calls | Constant | Paid out at settlement |
| Room to plan | Very little | Breathing space to rebuild cash flow |
We price every loan on your individual circumstances, and we give you the sharpest rate available for your situation. You'll see the full terms before you sign anything.
How does refinancing business debt with fundU work?
The process is straightforward and we move quickly because we make our own decisions.
- Enquire. Tell us the debts you want to clear, the property you can offer and roughly what's owing on it. It takes a couple of minutes and doesn't affect your credit score.
- Talk it through. A lending specialist calls you back to understand the story, including how the debts built up and how the new loan will be repaid.
- List every debt. You collect payout figures from each lender, provider and creditor. We help you spot anything missing.
- Indicative terms. Our credit team sets out the loan amount, security, repayment option and term.
- Valuation and documents. A registered valuer may confirm the property value, and the lawyers prepare the mortgage documents.
- Settlement. Existing debts are paid out directly on the day, and any agreed working capital goes to your business account. Funding can happen in as little as 24 hours once approved in some cases.
We can lend by first mortgage, refinancing an existing lender out, or by second mortgage behind your bank. Read more about how a second mortgage works for business.
Is debt consolidation right for every business?
No, and we'd rather be honest about that up front. Consolidation works best when the business is fundamentally viable but has been squeezed by expensive, fast-moving debt and a temporary dip in trade.
It works well when:
- the business makes money on a normal month once the daily debits stop
- there's real equity in a property to secure the loan
- there's a clear way to repay, such as a bank refinance once your credit file recovers, the sale of an asset or steady cash flow
If the business is losing money every month even without debt repayments, a consolidation loan buys time but doesn't fix the underlying problem. In that case our team will talk frankly with you about a plan, which might include cost changes or a sale. If things have reached the point of statutory demands or threats of liquidation, our business rescue finance page is the better place to start. For keeping creditors onside while you arrange funding, see our guide on how to talk to creditors and buy time.
Example scenario
An Auckland hospitality business with two sites has three online loans with daily repayments, one merchant cash advance and about $40,000 in overdue supplier accounts. Together the daily deductions are taking most of the weekday takings, and the owner has started paying GST late. Total payout figures come to roughly $265,000, including $35,000 of overdue GST.
The owner's family trust holds a rental property in Hamilton worth about $720,000 with a modest bank mortgage. fundU lends $290,000 by second mortgage over the rental, leaving the bank loan in place. At settlement every lender, the advance provider, the suppliers and IRD are paid directly, with the balance kept as a working capital buffer. Interest is capitalised for the term, so there are no scheduled monthly repayments while trade recovers. The exit plan is a bank refinance in about eighteen months once the credit file and figures have improved.
What you'll need
Getting started doesn't require a full set of accounts. For the initial assessment, have these handy:
- A list of every debt you want to clear, with the lender or creditor name and approximate balance
- Recent statements or payout figures where you already have them
- Details of the property offered as security, who owns it and what's owing
- Two or three months of business bank statements showing the deductions
- A short note on how the new loan will be repaid
- Any IRD statements from myIR if tax arrears are included
- Company details or your NZBN if you trade through a company
How do I start consolidating my business debt?
Start with a conversation. The sooner you stop the daily drain, the more options you keep, and often the more equity you protect. We'll look at the full picture and tell you straight whether consolidation makes sense.
When you're ready, see if you qualify in a couple of minutes, with no effect on your credit score, and a fundU lending specialist will call you back. Prefer to talk now? Call 09 875 4577.
Frequently asked questions
Can fundU pay out a merchant cash advance?
Yes, in many cases. A merchant cash advance can usually be settled by paying the provider the remaining balance they're owed. We ask for a payout figure from the provider, include it in the loan, and pay it directly at settlement so the daily deductions from your card takings stop. Check your agreement for any early settlement terms first.
What types of business debt can be consolidated?
Common examples are daily or weekly repayment business loans, merchant cash advances, overdue supplier accounts, business credit cards, private loans, overdue council rates and IRD arrears such as GST, PAYE and provisional tax. The key requirement is that the debt is business related and that there is enough equity in the property offered as security to cover the new loan.
Will consolidating my business debts reduce my repayments?
It often reduces pressure on cash flow, mainly by replacing frequent daily or weekly deductions with one loan that may be structured interest-only or with capitalised interest. Every loan is priced on its own circumstances, so we can't promise a lower total cost in every case. We'll show you the terms clearly before you commit.
Do I need financial statements to refinance my business debt with fundU?
No financial statements or tax returns are needed for the initial assessment. We look at the property, the debts you want to clear and how the new loan will be repaid. Recent bank statements, lender statements and creditor lists usually tell the story well, and we'll let you know if anything further is needed.
Can I consolidate business debt if my credit file has defaults?
Defaults, arrears and past missed payments are considered case by case. Many owners come to us precisely because stacked short-term loans have started to damage their credit file. What matters most is the equity in the property and a realistic plan to repay the new loan once the expensive debts are cleared.
How does the money get to my old lenders?
Usually our lawyers or yours pay the existing lenders and creditors directly at settlement, using payout figures confirmed in advance. That way every account is settled on the same day and nothing is missed. Any agreed balance for working capital is then paid to your business account.
A practical next step
Ready to see what's possible?
Tell us what the business needs, when you need it and what property is available. A fundU lending specialist will call you back to talk it through — enquiring is free and won't affect your credit score.