What Business Debt Refinancing Can Do For You

It can sometimes be very advantageous for businesses to pay off multiple high interest debts with a single consolidated loan, arranged through business debt refinancing. When the individual terms of those high interest debts are significantly less advantageous than the terms of one consolidated loan, that’s a case where business debt financing should be seriously considered.

If two or more of the following conditions are true for your small business, it might be worth your while to consider business debt refinancing:

  • Your operational budget is set and strong – when your operating budget is very predictable, and appears likely to stay that way for the foreseeable future, you might be a good candidate for multiple debt refinancing.
  • Most current debts are short-term – if most of your current debt obligations are short-term, it might be worth your while to take on a longer-term consolidated debt, so that you have more cash flow to cover current requirements.
  • It represents a savings over current debt payments – the only reason you should consider multiple debt refinancing in the first place is if it saves you money over your current debt load. If your debt payments with a consolidated loan are greater than your debt payments with individual loans, it’s simply not worth your while.
  • Increased reputation – it does help the reputation of your business for you to have fewer creditors, and by refinancing into a single, consolidated loan, you end up with a single creditor and a single payment that is much easier to manage.
  • Associated fees are obvious and favorable – you need to make sure that when any associated fees are added into the total cost of your consolidated loan, it doesn’t offset the savings you would otherwiserealize by having a single outstanding loan. Hidden fees are well known to decrease the appeal of debt financing, and reduce the value that might have been gained without those fees.