Refinance Business Loan To Raise Capital

Refinancing when you are in a stronger position means you can access new agreements that offer improved terms. Some of the benefits of refinancing include consolidating your debts, reducing monthly repayments or extending your loan terms. 

But what if you need more capital? Rather than trying to secure an additional credit agreement from another lender and complicating your debt position, why not explore refinancing? If your business has grown in value, we can help you negotiate an agreement that offers superior rates and cash to use to invest in your business. 

How can refinancing help raise capital?

As your business grows in value, its profitability will grow. Any historic loan agreements you’ve taken out will have been offered at the original value of your business or against another metric such as a property’s selling price if investing in property. 

Rather than continuing to repay loans based on past value, you can refinance to a different agreement – whether that’s with the same lender or a new one. By demonstrating the increased value of your business, you’ll be able to field lender offers for greater loan amounts over longer repayment periods. 

In effect, this means you’ll have more cash to use in the business and longer to repay it. This may mean switching loan type in a way you had not considered, such as when refinancing from a business loan into a commercial mortgage or from a bridging loan into a business loan.

The arrangement will depend on what your lender is willing to offer and how the terms will suit your business. 

Why refinance a business loan? 

• Is your loan's repayment period too short and causing you to worry?
• Are the rates favourable or too high?
• Can you access any additional credit in your loan?
• Is your lender communicative and helpful? 

Business loans vary in how they are secured and what they offer. Refinancing is not always a viable option for you. For example, if you've taken our asset finance the lender typically secures the agreement through the value of the assets - so refinancing may not help unless the assets have grown in value. 

If you've taken any other form of business finance, your rate/terms are generally based on the value of your business at the time you took it out. Refinancing is how you can make lenders recognise its most current value and offer better terms as a result. 

Refinancing your original business loan means forcing lenders to address any increase in value to your business, so whatever security you had used in the past is less relevant than the new position of your business. As you’ve become more profitable, lenders will see less risk in offering finance and, therefore, can provide better loans and arrangements. 

Commonly, business loans are available from high-interest cashflow lenders who demand higher repayments to supply you with the cash you need to grow. Once you’ve put the work into growing, why stick with those same rates if you can refinance to better ones based on the true value of your business? 

How to refinance your business loan

Refinancing is all about establishing your business’ value in the eyes of a lender. That means finding the right lenders who work in your industry and can supply what you need, but also preparing the right application and negotiating terms with lenders. You’ll need to demonstrate the increased value of your business and leverage it to negotiate better agreements with lenders. 

Choose Rangewell, and we’ll help you understand the refinancing process, prepare your application, field lenders from both challenger and mainstream lenders and then negotiate on your behalf to get you the best possible terms. 

For an example of what we can do, click here to read a case study about how we helped a client move from a £860,000 to a £1.4m loan that enabled them to invest in their business's future. 

Refinance with Rangewell

Refinance your business loan with our help today. Get started by calling us and talking us through your existing situation. We’ll help you explore your options and see if refinancing is right for you. We act on your behalf and at no cost to you, so you can trust that you’ve got experts acting on your side. 

Unlock capital from your finance arrangements and build on your business success with Rangewell. Click here to get in touch.