Are you asking the right questions when refinancing a small business loan?
The Reader’s Digest has an article with a long list of things you probably aren’t replacing often enough. Their list includes things like your toothbrush – that according to oral hygienists needs replacing every 3 months. Apparently, bedding is another one on the list. With its tendency to harbor dust mites, replacing bedding every two years is considered good practice, especially if it’s used nightly. Not surprising, also on the list is your car insurance. With the constant changes in premiums and pricing, and the devaluation of your car on an annual basis, it’s good to check your options again each year to make sure you’re getting the best deal.
Things need to be replaced over time, it’s not strange or uncommon. There are just better offers out there that can help you save or maintain better health. It’s not that different when it comes to business loans or financing.
If you’re struggling with a high-interest rate or monthly payments on a business loan, you may be able to replace the existing business debt with a new, more affordable loan. Refinancing is used to consolidate several business loans into a single monthly payment and avoid high payments on these commercial loans. Refinancing may seem like a bad option, but it can turn out to be a money saver. Consider this: Refinancing can give you a lower interest rate than what you currently have.
What is the purpose of refinancing?
Paying off current business loans with a new loan consolidating your debt at a lower cost can help increase cash flow, which can be especially helpful in an uncertain economy or if your business is financially tight each month. Improving your business’ cash flow means that you will have more money to see to the important things in your business like purchasing the inventory you need.
How do I determine if I need refinancing?
Figuring this part out might be tricky, but asking a few simple questions might help ease the process.
It’s necessary to assess what your refinancing goals are. Do you need to improve cash flow? Perhaps you need to purchase new equipment or pay staff. Make sure that any refinancing plan will help you achieve your end goal and not put you in a worse off position. Check that the interest rates really do benefit you, and calculate the costs you can save on current loans. Refinancing isn’t always the solution. Along with upfront charges loan holders are often responsible for appraisal, application or early settlement fees, as well as closing costs, so be sure to check for these in the small print.
Luckily businesses like Lulalend don’t charge any appraisal or application fee. When you apply through our website, you receive an obligation free quote and there are no hidden or early settlement fees involved.
Lending the smart way
Once you’ve concluded that your business will benefit from refinancing, you should look at the available options. When it comes to getting approved from traditional lenders there is a tedious process that needs to be followed. But with Lulalend you can apply quickly and easily on our website. This means no never-ending paperwork or waiting months for a decision.
Do your maths and double check that you are able to afford the refinancing to be sure that it won’t put your business under strain. Refinancing can help lower the amount of your repayment every month, but you need to be sure that this is the best strategy you should be adopting. Make sure that borrowing more money will indeed do this for your business. Be sure that you don’t overborrow. You want to be able to use refinancing to manage debt, not add to it.
Sustaining a business with a lack of funds can prove to be quite a struggle. F unding with Lulalend can help you secure extra funds for your business. If you’ve been with us before, you know that we are dedicated to giving the best customer service possible, and we care about the success and growth of your business. Another advantage of taking out business funding with us is that we focus on building real relationships with our clients, because we care about small businesses and are committed to helping them reach their potential.