Refinancing a Growing Business To Unlock £1.4m Cashflow Injection

Most business credit is granted based on the value of your business or property when you take out the loan. That means that for businesses that grow significantly, pre-existing loans are usually not reflective of their current situation. 

Put simply, if you’ve taken out loans in the past for your business, you may be able to access a better rate or extend your repayment period through refinancing. For a client who approached Rangewell, the increased value of their business meant they knew they were paying over the odds.

In addition, they wanted to raise more capital to fund the purchase of a competitor’s business, but without having to take on yet more lenders or individual loans. With an existing £860,000 loan in place, the client knew they needed expert support to get the best solution around refinancing to raise capital. 

Why was there a problem?

The client had grown their business and had improved profitability, but their existing £860,000 loan did not take this into account. The client had done some initial research and been enticed by high-interest cashflow lenders but knew that their increased business value should be rewarded with better rates and an increased credit facility. 

When their competitor approached them about selling the business, our client recognised the need for a new loan or increased credit to fund the purchase. They didn’t, however, want to pursue a separate loan from another lender and instead wanted to explore their options. 

Why we were able to help

Rangewell are experts in refinancing and we were able to quickly identify the increased value of the client’s business and help them showcase it via a strong business plan and application. We fielded their refinancing requirements to a range of mainstream bank lenders rather than the high-interest ones the client had already tried. 

We negotiated with the lenders to ensure they could understand the increased value of the client’s business and lend against that, which meant decreased risk for them and a favourable offer for the client. 

The client’s original £860,000 was increased to a £1.4m facility with their repayment period extended to 15 years. Even with the greater credit and longer terms, the client benefitted from a reduced interest rate. 

This loan allowed the client to buy their competitor’s business and further strengthen their own. With a longer, more manageable repayment plan in place, they now have the business profitability and cashflow needed to maximise future growth. 

Raise more credit with refinancing

Finding the right lender that will lend based on your most up-to-date business value can be enormously beneficial for businesses of all types. If you have multiple loans from different lenders, refinancing can consolidate your debt into a single repayment. 

Alternatively, as was the case for this client, you can refinance to a higher credit facility without increasing your rates. In fact, many clients can actually access lower interest rates even when raising more cash thanks to the increased value of their business. 

To refinance successfully, choose Rangewell to help you prepare and submit your application, guide you through the lender’s market and negotiate the best deal for you. If your business has improved since your original loan agreements, see how refinancing can help you by working with Rangewell today.