Why Now May be the Best Time to Refinance

2020 Oct 20

Why Now May be the Best Time to Refinance

Chris O'Shea | Raising Finance

In these uncertain times that we are currently experiencing, of furloughs, lockdowns and COVID19, we have seen extra pressure on business finances.  

Having spoken to several clients, it’s our view that this may be a good opportunity to review your current financial arrangements, such as your existing business loans.

Why Would You Want to Refinance Your Existing Loan Facility?

Why would you want to refinance your existing business loan? You may find that you can now achieve a better rate or term than you originally received on your existing facility. Many lenders base their lending criteria on the length of time your business has been operational and the business profits. As your business matures and becomes more profitable, you will likely be eligible for better interest rates and terms.

By reducing the interest rate or changing the length of your repayment term via refinancing, this could help free up working capital for your business, as well as save you money over the term of your loan.

How do you Refinance Your Existing Business Loan?

This is the area where we can help!  We have a panel of lenders that would be able to assist you with refinancing your existing business loans. 

By refinancing to the correct lender, you can achieve your goal of reducing the overall loan payments that you are currently making on your business facility. 

What information will the lenders need to take forward your application: 

Personal Profile Forms

This gives lenders an understanding of an individual’s financial background, it sets out what current liabilities they have and breaks down personal assets. 

Personal & Business bank statements

These help to verify your personal & business monthly income and expenditure. A good bank account conduct is a huge positive for lenders when assessing any application. 

Three years of financial accounts

These are used to demonstrate the business profitability, the bank must verify that the lending will be serviceable. Displaying a strong financial performance by the business over a period helps assist with a positive lending decision.  

Existing loan details

Such as; reason for the original loan, existing balance, monthly payment, Interest rate, remaining term, and early prepayment penalties (if any).

You may also be interested in consolidating multiple business loans and refinancing them into one facility, this would allow you to benefit from better terms on all your business lending.

Some clients have purchased business assets from their working capital instead of using finance. This can put pressure on a business’s cash flow.  You could, instead, explore this area and re-finance recently purchased assets onto a finance agreement, meaning that the items can be funded over a longer term. 

Samera Finance are experienced brokers with a banking background and access to many lenders. It’s always best to explore the market and see what is available rather than just approaching a single lender.

Please contact us directly if you wish to explore your options. 

About Chris O'Shea

Chris is the Digital Marketing Manager at Samera, in charge of content, social media and marketing.

Outside of Samera he is usually reading, playing guitar or playing with his cat Zelda.