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Business loan refinancing

What to consider when you want to refinance your business loan

Running a long term profitable business is a constant fight to lower costs and increase profits. As a business, if you are able to boast impressive finances or a strong potential profit then there is a very real chance that you will either be able to apply for your first business loan or consider business loan refinancing on an existing loan. It's a fact that when most businesses take out their first loan they are not offered the most preferential rates because they are still something of a risk.

Why use business loan refinancing

However, it's also a fact that once the business has been in operation for some time and is showing either strong results or stronger potential, it will be less of a risk. This is when business loan refinancing becomes a potentially very lucrative option. That's not to say that new businesses should not use a business loan from their inception, but it does mean that business loan refinancing should be a serious consideration for any company once it reaches a point that it has more to offer a lender.

Ask your existing bank for better rates

We all know the rules on getting a lower rate for loans and even mortgages once an account has been shown to have less risk than initially though. Contact your lender and tell them that a competitor has offered you preferential rates. You might be surprised at just how quickly your bank manager or other lender is willing to help with your business loan refinancing in a bid to prevent you from giving your money to an opposing bank.

A new business plan

Business loan refinancing is generally much more successful if you take this one single step. However, keeping an eye on business loan rates always gives you an excellent picture of your negotiating power. You will need to create a new business plan that should be equally as appealing and contain more hard facts than mere speculation and forecasting. It will be worth it in the end.