Because you need capital to grow, you may open a small business credit card or a line of credit, or take out a short-term loan.
If you take out a new form of credit to consolidate your debt, for example a credit card that’s interest-free for a year, and immediately close all other forms of credit it could actually hurt your credit score.
A component of your credit score is the ratio between your open lines of credit and the amount of capital you’ve borrowed.
Check for Prepayment Penalties Before signing on the dotted line to consolidate your debt you should look into a few more things.
Some lenders charge a prepayment penalty on their loan products.
This is because when you pay off a loan early they’re not making as much money on it as they had planned.