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Most companies will have at least some outstanding borrowing, whether that is in the form of business loans, an overdraft, or a type of asset-based lending. If managed well, debt is not necessarily a bad thing, in fact it is often integral to maintaining a healthy cash flow as well as giving a company the opportunity to grow and expand its operations.
While the borrowing your company has may have been just what your business at the time it was taken out, this does not necessarily mean it is the most appropriate or cost-effective form of funding now. In the years since your company took out the finance it is likely the business has undergone some changes, whether positive or negative, and the need for outside funding may have subsequently altered as a result. The commercial finance marketplace itself is also a different place now, with more scalable and flexible products now more widely available.
The good news is that it is possible to refinance existing business borrowing, allowing you to move your outstanding finance to a new product with either the same or a completely new lender. Many businesses find they can not only save money but also secure funding which is more tailored to their current needs by exploring this option.
It may be the case that you were limited as to what you were previously able to borrow – this is often the situation when your company is in its infancy – however, with several years of trading behind you, you may well find banks and other finance providers are more open to lending. Through a process of refinancing, you may be able to increase your current loan amount, or secure the borrowing at a lower rate of interest with more favourable repayment terms. You may also want to consider whether your current funding channel is the best way of your company borrowing money. While many business owners will opt for a traditional bank loan, a form of asset-based lending such as invoice finance, may well be a cheaper and more flexible way of obtaining credit.
An invoice finance arrangement is completely flexible, with the amount of money accessible to you increasing as your business grows. As you only pay interest/fees on the amount being borrowed, it could also save you paying unnecessary interest on money you don’t need access to at that moment in time.
At UK Business Finance, we have a dedicated team of commercial finance experts waiting to help you navigate the process of business refinancing. We will scour the whole marketplace, as well as using our existing relationships with some of the country’s largest finance providers, to secure the very best deal for your company. We will be with you every step of the way from initial factfinding, throughout the application process, only ending when you have the money in your bank account. To take the first step, call out expert team today.
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
What are the finance options for a growing or expanding business?
With such a wide range of finance options available for growing and expanding businesses, it’s difficult to know which one is the most suitable. This stage of business is crucial, however, and it’s important to make the right funding choices.
How to finance a business
Business financing and funding options have expanded greatly in recent years and you’re no longer restricted to loans from the major banks. The alternative finance market offers funding solutions that you may not have considered before, and that are typically quick to obtain.
How to get a business loan
The right type of loan can kick-start your business or provide the financial support that enables growth. Not all business loans are made equal, however, and it’s important to know your options and how to source the best deals.
What is a debenture?
A debenture is a legal document used to define the terms of a secured business loan for a limited company or limited liability partnership. It includes the full amount of the loan, the interest rate and term, and the specifics of the lender’s rights to the asset mentioned.