Refinancing is swapping one business debt or external investment for another. Debt consolidation simply means refinancing multiple business debts into one. The main reasons why you might consider refinancing are listed below...
Most businesses benefit from having some financial head room even if it carries some cost.
The consequences of defaulting on business debt can be very serious, from upsetting suppliers or employees to getting a CCJ or facing the threat of insolvency
A refinance could help your business live a little less 'on the brink', so you can worry less, and grow your business more.
Refinancing can provide costs savings through reduction in interest rate and other charges, or cash savings through financing over a longer term to reduce monthly repayments, in most cases both cost and cash savings are achieved in the same refinancing.
Wealth warning – when assessing your options make sure you take into account any arrangement fees and professional costs associated with new finance and exit fees associated with repaying current debt.
If you’re refinancing multiple debts into one, that means you’ll only have a single set of payments to worry about, and a single point of contact with one lender instead of several. That means you can concentrate on the day-to-day running of your business without worrying about managing your relationship with multiple creditors.
Wealth Warning – the cost of simplicity is that you are reduced to 1 finance supplier that may restrict you from taking on the finance you need to grow, or may not act as positively or as quickly as you would like, if and when more finance is required. Simplicity is a good thing in the right circumstances but do weigh up the Pros and Cons carefully!
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