Refinancing To A Fixed Rate

If recent fluctuations in interest rates have you questioning your business' finance agreements, it's time to consider refinancing to a fixed rate. 

Commercial loans, no matter which type of business you run, are always offered with repayment terms that can vary from acceptable to outlandish. Whatever cash amount you secure, the lender will generally set an interest rate, repayment period and even demand additional security against the loan. The instability of the business world means you can never be sure what offer you'll get until you approach the market. 

For businesses that go it alone and secure finance without a broker acting on their behalf, this can mean accepting a loan with repayment terms that don't suit your growth plans. But in most cases, you've already accepted the loan because you needed the cashflow injection and any issues only begin to appear once you move past the initial reason for the loan and start to try and grow. 

Variable loans, in particular, are guilty of causing issues long after you've first secured your finance agreement. What may have been a low-interest rate at the beginning can quickly jump to expensive or restrictive. For that reason, it may be worth refinancing to a fixed-rate loan instead. 

Businesses can refinance to a fixed rate across a set number of years, which in turn allows you to plan your finances more accurately. While you may have accepted other forms of credit to establish your business or for help during an emergency, the instability of variable rates makes it hard to grow. Once you're profitable and stable, choosing a fixed-rate refinancing agreement can be a sensible choice. 

Why refinance to a fixed rate?

Fixed rates are sometimes viewed as more 'expensive' because the interest rates stated can be higher than variable. However, the guarantee of a stable fixed price allows you to plan for business growth and account for repayments without any complications. The longer you can secure a fixed rate, the more certainty you have around your business's future. 

Fixed rate mortgages are typically available over a number of years, from three to five and seven or even longer. Interest rates will depend on which option you choose and which lender you approach - so it pays to analyse the market and choose a finance provider that meets your requirements and offers the best combination of interest rate over longer terms. 

Refinancing enables you to take any existing debts and switch to a different credit product. The lender takes on your existing debt and rather than repaying your old provider, you'll deal solely with the new lender. Better yet, you can also refinance multiple loans into a single facility to simplify your debts and make cashflow forecasting easier. 

When it comes to refinancing to a fixed rate, you need someone to act on your behalf in the lender's market and help make your application as strong as possible. Lenders want to see evidence of stability and business progression to be able to offer the security of a fixed rate. The less risky your business appears, the stronger the terms you'll be offered can be. 

Choose Rangewell to act as your finance experts. We'll help you secure a better fixed rate by helping prepare your application, negotiate with lenders and secure an offer. 

Refinance with Rangewell

As the market continues to fluctuate, interest rate volatility is high and businesses everywhere are feeling the pressure. If your business is performing strongly and is in the right position to refinance, opting for a fixed rate loan can give you more visibility to plot growth, and even deliver cheaper repayments in light of surging interest rates. 

Essentially, fixed rate mortgages are a trade-off between the certainty of fixed repayment amounts over a number of years versus the risk and volatility of a variable one. If you want a more certain future to plan your business around and you know you can repay the stated fixed rate, refinancing from any other agreement can help insulate you from market and global shifts. 

Rangewell are here to help you, guiding businesses through the refinancing process, finding the perfect lenders and preparing your application to negotiate the best possible deal. If you'd like to refinance to a fixed rate, contact us before you speak to lenders to see how we can help.