It is always prudent to review your existing loans to make sure you are getting the best option available, especially since the cost of refinancing has dramatically reduced in recent years and lenders have become very competitive.
Some benefits of refinancing include:
You could secure a lower interest rate, thereby reducing your repayments and improving your cash flow, or reducing the length of the loan.
You could access increased finance for further investment, particularly if you have a good repayment history and your business has improved since the establishment of the original loan.
Restructuring the type of loan may suit your future requirements. For instance, moving to a line of credit will provide you with access to money for future requirements without you having to apply for separate loans, which could be costly and time-consuming.
Consolidating existing debts will ease your cash flow and administrative requirements.
Refinancing may allow you to release your personal assets as securities against existing loans.
Refinancing is simply about making sure you are in the best possible financial position with your lending, interest rates, servicing and access to future funds.
There is no need to overcomplicate it, as refinancing can most definitely help you achieve your goals. It is not always an option you will need to take, but there will be times when it could do great things for your business.
If you would like to know more and how refinancing could help you, do not hesitate to contact us. You will see the impact these changes have on your profit margin, your asset turnover and ultimately your return on assets. Now you’re starting to really see where your business is financially and what you need to do to get you to where you want to be.
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Tony has 33 years’ experience as an accountant, and 13 years’ experience as a CPA. His first 18 years’ experience involved financial, management and operational accounting roles at a senior management level, in the security, transport, and forensic accounting industries