Most businesses don’t operate in a vacuum. You might be juggling a mortgage, a couple of equipment leases, and an existing merchant cash advance while still needing working capital to take advantage of a sudden opportunity or cover a seasonally slow patch. The critical question is not whether you have debt, but whether you can demonstrate the discipline to carry it alongside a new loan. The firms that get that right understand two things: lenders care about repayment capacity more than loan counts, and not all debt carries the same weight.
Can You Get a Business Loan While Carrying Debt?
Yes—but only if you treat your existing obligations strategically. Personal loans, mortgages, or auto financing usually live outside your business financials, which keeps them from skewing underwriting metrics meant to capture business performance. A business lender looks at cash flow, not how many cards you’ve maxed out.
That said, “loan stacking” remains a red flag. Taking multiple short-term cash advances with overlapping repayment schedules squeezes cash flow and invites covenant breaches on prior deals. A restaurateur who already has a high-margin line of credit and then layers three merchant cash advances typically ends up with payments they can’t service, even if revenues are strong on paper. Lenders will either decline or impose punitive terms.
The solution? Keep payment history clean, keep business and personal accounts separate, and limit new obligations to one sensible addition. If you need more capital, consider consolidating multiple high-cost notes into a single loan or pursue longer-term financing from a partner who can align payments with your cycles.
Debt Ratios That Tell the Real Story
Lenders don’t just count loans—they measure endurance. Two ratios dominate the conversation: Debt-to-Income (DTI) and Debt Service Coverage (DSCR).
Debt-to-Income
When a lender asks about your DTI, they’re basically asking, “Can your personal finances handle another guarantee?” Keep that beneath roughly 36% if you want to sidestep higher rates or limited offers. If you’re at 48% because you’re paying off an entrepreneur’s first home while underwriting a growing software firm, expect skepticism, even if the business itself is profitable.
Debt Service Coverage Ratio
DSCR focuses on the business. Take your net operating income and divide it by all debt payments. A DSCR of 1.25 is usually the baseline for lenders—below 1.0, you’re not covering the obligations without outside funds. Some businesses sitting on a DSCR of 0.9 still manage to access capital by reducing costs, extending payment terms, or injecting equity before applying. Others bolt on a new term loan when their DSCR is closer to 2.0 because the lender knows the incremental debt is manageable.
These ratios interact. A strong DSCR can offset a middling DTI; a weak DSCR will torpedo an otherwise tidy personal ledger. Focus on improving cash flow (to lift DSCR) and paying down unnecessary personal debt (to trim DTI) before sending out applications.
Debt Consolidation vs. Fresh Capital
Not every business is trying to expand. Some are trying to breathe by simplifying their debt.
Consolidation is the sensible move when you have multiple high-interest loans or uneven pay schedules. One payment reduces administrative overhead and often drops your monthly obligation, which helps both DTI and DSCR. Imagine replacing three short-term advances, each with daily remittances, with one fixed monthly payment tied to revenue—you gain predictability.
Refinancing makes sense when one loan has unfavorable terms. Extend the life, lock in a lower rate, soften the repayment cliff, and you preserve the ability to fund growth without piling on debt. But be honest: refinancing doesn’t reduce debt load, it repositions it.
Additional capital is only justifiable if the new funds generate a return that surpasses the extra cost. A manufacturing company might borrow to buy a new CNC machine that reduces labor hours and allows higher-margin custom work; the increased revenue boosts DSCR despite the new payment.
Why ICG Funding Works for Borrowers with Existing Loans
ICG Funding doesn’t chase profit statements; they analyze real cash flowing through your accounts. If your business has at least six months of operations, consistent deposits, and a FICO of 500+, their team can often approve funding within 24 hours.
They look at deposit frequency, average balances, and revenue consistency instead of obsessing over tax-return adjustments. That flexibility makes a difference when conventional banks balk because of a high DTI or complex financing history. An ICG rep might recommend consolidating multiple high-interest debts into a single structured loan, or offer a term loan/merchant cash advance tied to future sales. Either way, the goal is to match repayments with cash flow so you don’t slip into default.
ICG’s Revenue-Based Funding program adjusts payments according to your receipts, which is particularly helpful when seasonality spikes. Their Working Capital and Term Loan options offer practical paths to restructure debt versus simply adding another high-cost advance.
Final Thought
Existing loans don’t have to be deal-breakers. The businesses that get approved are the ones that understand the trade-offs, manage both sides of their balance sheet, and partner with a lender who evaluates cash flow holistically. ICG Funding is built for that kind of borrower—someone who needs flexible underwriting, same-day responses, and repayment plans that adapt when revenue bumps up or down.
If you’re balancing debt but confident in your revenue, start the process with ICG today and see how their cash-flow-based approach can help you consolidate, refinance, or invest in the next growth phase. Apply now for funding and get a clearer picture of what your business can handle.
