Obtaining a new loan, at better rates and terms, to pay off your existing loan is a business loan refinance. By refinancing your business loan, you may be able to reduce the interest rate of your loan, change the length of your repayment, or consolidate your small business debt.
Some of the reasons that people refinance business loans include:
- Reduce monthly payments
- Reduce total APR
- Reduce total cost of capital
- Allow for additional borrowing
- Make payments more convenient (e.g., paid monthly instead of weekly or daily)
To prepare for a business loan refinance, you should:
Create a Clear Goal for Refinancing
Review Your Existing Debts, Capital Needs & Origination Fees
Put Together a List of Your Existing Debts
Consider Additional Capital Needs & Estimated Origination Fees
Use an Equation to Determine Your Refinancing Amount
Once payments have been issued to pay off your prior debts, follow up with the account holder to confirm that your debt has been paid in full. Obtain a record of the payoff and file it with your business documents. Next time you review your credit report, check to make sure those debts are no longer listed as active accounts.
This post was written by fdfadmin