Refinancing your business and why it may be advantageous

  • 15th July 2015
  • News
  • Stewart Hindley

Should you find yourself swamped by the financial obligations of your business, one potential option is to refinance. This can help you to attain a more favourable deal with your mortgage and financial commitments and relieve the pressures on your company. As specialists in bed and breakfast finance and mortgages, we can help you to refinance your business and secure a brand new deal that you will, hopefully, find a lot easier to manage.

Refinancing is simply the replacement of your current debt with a new lender. It can be used as a means of securing new funding for your business, helping you to grow and expand. It can also be used as a way to keep the business going through financial difficulties. It essentially provides you with extra funding under a new set of obligations delivered by an entirely new lender. One reason many businesses choose to pursue such an option is to essentially gain a more favourable set of obligations than were originally offered. If a business has a substantial portion of funds to access, then refinancing could help them to manage their debts and payments much easier.

Refinancing is advantageous because it can help to significantly boost your cash flow. By taking on debt under changed obligations, a business can find themselves a set of obligations that are advantageous to them, such as through the alteration of interest rates and lowering of monthly payments. It can also be used to reduce the risk of an associated loan. For example, it can be used to change the financial obligations and the rates of the loan, providing you with a better financial foothold on your business.

Refinancing usually requires a set of prior requirements before a new lender will provide you with funds. A business should have a substantial plan in place to assure the lender that the money won’t be wasted or spent unwisely. A business should also be able to service debt without duress considerably and the cash flow should be on hand to allow them to do so. The trading profit generated by the business should service the debt under the lender’s debt stress criteria, and the last three years of statutory accounts and management information should be produced. These will ensure that the chances of success in refinancing are maximised.

When it comes to refinancing, we will work diligently with you to understand how your business works and to examine the best refinancing options that are available. We will guide you through the risks and rewards of each option and ensure that you choose one that is completely beneficial to your business. We will provide you with as much help and advice as possible, whether you need bed and breakfast finance or marine finance.

Stewart Hindley

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