By: First Union
Should You Refinance Your Small Business Loan?
Maybe you have taken out a business loan or perhaps an equipment loan. Maybe you even have multiple short term loans as you're a relatively new company just trying to get ahead. The question now stands, does it make sense to refinance the loan? A number of small companies find themselves in just this position. Basically, by refinancing you're taking out a new loan and using the capital to pay off the existing loan(s/). A number of business owners might do this in order to procure more favorable terms; for example, if you do have a higher interest short term loan, you might find yourself in a position now to get a longer-term loan with lower costs.
So what are some of the benefits associated with refinancing your small business loan…
- You can potentially reduce your monthly payments, depending on the termsduration of the new loan.
- You might be able to reduce your APR.
- You may also be able to work out a payment schedule that fits your business needs better.
You do however want to be careful. If you don't do your homework and take the time to understand the terms of the refinance you could actually end up burdening your company even further with debt. Prior to refinancing, make sure you have all the facts.
- What is the current unpaid balance of your existing loan
- What is your monthly payment
- Interest rate
- Any prepayment penalties
At First Union, we'd be more than happy to sit down with you and see if refinancing your existing loan makes sense for your small business. We offer merchant cash advances, SBA loans, lines of credit and we have ample resources to get you the cash you need quickly. Some get funded in as little as two days. Call us today—we're here to help!