Refinancing and consolidating business debt

Many businesses run into trouble and suddenly feel the pinch of existing debt. In these situations, refinancing business debt might be the answer.

Were you looking for asset refinance? This page is about business debt consolidation and refinancing loans.

Refinancing (or ‘business debt consolidation’) means consolidating multiple business debts into one, or changing one loan for another. The overall idea is that a business can swap expensive debt for more affordable debt, and give themselves a little extra breathing room in terms of working capital.

Of course, this situation can raise some affordability concerns, so you have to be very careful that you’re switching to a facility with suitable terms and rates for your situation, and not taking on too much risk.

Here’s a few reasons you might consider a refinance for your business:

Savings

This is the most obvious reason to refinance: to gain a lower rate of interest or smaller monthly repayments.

Decreasing your overall rate of interest helps you pay off your principle faster and get back into the black — or you could choose to spread the same loan amount across a longer period of time to reduce the size of individual repayments.

Simplicity

If you’re refinancing multiple debts into one, that means you’ll only have a single set of payments to worry about, and a single point of contact with one lender instead of several. That means you can concentrate on the day-to-day running of your business without worrying about managing your relationship with multiple creditors.

Safety

Refinancing helps you improve your cashflow position, because you’ll have more working capital available that’s not being poured into expensive finance any more.

The consequences of defaulting on business debt can be very serious, for example getting a CCJ or facing the threat of insolvency — a refinance could help your business live a little less 'on the brink', so you can worry less, and grow your business more.

We can help

There are so many options in business finance these days, and business debt consolidation depends on a number of factors. We work with over 50 lenders offering dozens of products from the whole spectrum of business finance, so we can find the option that's best for your business — whether it's a peer-to-peer loan or an asset refinance.

Please note, Funding Options cannot assist you with consumer debt. If you're looking for help with consolidating personal debt, visit the Money Advice Service website for debt advice.

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