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Funding glossary

Debt Consolidation

Combining multiple advances or debts into a single new facility with one payment — often used to escape a stack.

Debt consolidation rolls several existing obligations into one new facility with a single payment. In working capital, it most often comes up as the exit ramp from stacking: an operator carrying two or three overlapping remittances takes one new advance that pays off all the positions and resets repayment to a single, more manageable pull.

It is important to be clear-eyed about the trade-off. Consolidation pricing is usually worse than a clean renewal would have been, because you are unwinding a stressed situation rather than renewing from strength. But it is typically far better than the alternative — taking yet another stacked position — because it replaces multiple competing debits with one.

The best version of this story is not to need it: size the first deal honestly, and when you want more capital, renew with your existing funder around 50% paid down instead of stacking. If you are already stacked, a consolidation conversation — not another advance — is usually the right move.

Frequently asked

How is debt consolidation different from a renewal?

A renewal is offered by your existing funder from a position of strength and pays off one balance to add capital. Consolidation combines multiple existing positions — often a stack — into a single new facility.

Is consolidation cheaper?

It is usually more expensive than a clean renewal would have been, but meaningfully better than adding another stacked position. It trades cost for a single, more manageable payment.

When should I consider consolidating?

Most often when you are already carrying multiple overlapping remittances and the combined pull is straining cash flow. At that point, a consolidation conversation beats taking another advance.

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