For any business in the UK to generate a sufficient income, you must ensure successful day-to-day operations and a reliable customer base. As such, you must make sure that you have the means to invest in key growth and innovation projects. However, that requires access to sufficient amounts of capital, something that could prove challenging for many within the SME community especially. So to get around this obstacle, you may have raised capital using multiple business finance agreements. Although finance is vital for any business, having too many agreements running at the same time can prove expensive, placing more strain on your finances. Yet, if this describes the situation your business is currently in, there’s no need to suffer in silence. Refinancing could be the answer.
Why consolidate your business’ debts?
If your business is currently having to contend with multiple finance agreements, there are two reasons why you may want to consider Refinance. Refinancing allows you to converts all of your existing debts into a single agreement in order to pay a lower rate of interest or make managing your expenses less complicated as, if were you to keep paying out more than you can afford or accidentally miss a payment, it may hinder your ability to invest and could threaten your financial stability, leading to longer-term consequences.
What are the benefits of Refinancing your business’ debts?
Subjecting your business to multiple finance solutions can prove problematic in the long-run. However, you don’t need to just put up with it. Refinancing could be the solution you’re looking for. But before deciding to take this route, you need to be fully aware of what it means for your business. As such, some of the benefits of Refinancing your business’ existing debts include:
• More favourable interest rates
For many business owners, Refinancing could be a gateway towards gaining a more favourable interest rate. This could be because your business’ financial standing has improved or you’ve found a lender that can offer you a fairer deal. Either way, Refinancing may mean paying out less money each month and more income available for investment.
• Changing financial circumstances
When you agreed your existing finance agreements, you may have done so with a weak credit rating, causing your business to get charged a higher interest rate. This could’ve been on account of anything from outstanding CCJs, credit card debts or missed payments. Yet over time, the issues that plagued your initial application may have since improved, allowing you to gain a stronger credit rating. If so, Refinancing your business’ debts could lead to you receiving a lower interest rate and saving more money in the long run.
• Ease the pressure on your cashflow
In order to maintain your business’ day-to-day operations, your cashflow should allow you to manage and resolve the various expenses that are associated with it, such as business tax, utility bills, staff wages and supply costs. However, if you’re having to repay multiple finance agreements on top of this, resolving your operating costs and supporting investment may become problematic. But by consolidating these agreements into a single finance solution, you could reduce your business’ monthly outgoings and free up enough cash to invest in key areas.
• Less complicated
Having multiple finance agreements in place isn’t just expensive, tracking each monthly repayment also tends to become complicated and unwieldy. If you drop your guard, you could accidentally overlook one of these payments, incurring a missed payment penalty and forcing your business into an even worse financial predicament. However, by refinancing your business’ debts into a single agreement, you only have to concern yourself with one repayment scheme.
Are your business’ debts becoming unwieldy?
Acquiring the funds your business needs to grow whilst supporting day-to-day operations isn’t easy. You may lack the necessary cash reserves or the expense may be more than you can handle alone. However, during the early stages of your business, lenders may be unwilling to offer you large lump sums. So to obtain the capital you need to achieve your objective, you may have walked into multiple finance agreements. Although this may seem a good idea in the short-term, it may prove problematic in the long-run. Fortunately, there are plenty of lenders who could help consolidate your existing arrangements. All you need to do now is to source a cost-effective agreement to offer your business the support it needs to move forward.
At Rangewell, we’re an Access to Finance specialist who has mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if you’re existing finance agreements are strangling your business’ cashflow, apply for a Refinance agreement today or find out more with Rangewell.
