Refinancing Business Debt

How Does Refinancing Business Debt Work?

Find out how the process works, what your options are and enquire now to get the best deal with ABC Finance

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Gary Hemming

Author: Gary Hemming CeMAP CeFA CeFA CSP

20+ years experience in business loans

The finance options available to SMEs in the UK are growing at an incredible rate. The increase in innovative products, like merchant cash advances and peer to peer loans are great for businesses.

This creates an opportunity for business owners to review their current borrowing and refinance their business debt, saving them considerable amounts of money. Whether you’re looking to review a business loaninvoice finance facility or asset finance, reviewing your options regularly is a wise move.

Read on to find out exactly how you could benefit from reviewing your business borrowing to improve cash flow.

Reduce The Interest Rate

Business loan rates can be as low as 3% per annum and as high as 72% per annum. Reducing the interest rate can represent significant savings for your business. With such a difference in cost between different lenders, it’s vital that borrowings are regularly reviewed.

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Save On Your Monthly Payments

Consolidating business loans can free up your cash flow by reducing your monthly payments. This can be through an extension of the term, a reduction in the interest rate paid or a mixture of both. As long as the total cost to the business doesn’t increase, then anything that helps the cash flow of a business is always a good thing.

Reduce The Overall Interest Paid

If your business is able to make the payments without an issue, but there is still scope for a reduction in the interest rate, then serious savings can be made. By reducing the term of the borrowing, and keeping your monthly costs the same, you can drastically cut the total interest paid.


Having multiple payments coming out of various finance agreements at different times of the month can be a headache. Trying to keep track of numerous outgoings is more difficult than managing one monthly payment.

By refinancing your business borrowings into one loan, managing your finances will become far simpler.

Protect Your Cash Flow

Cash flow is one of the most important factors in running a business in the real world. If you have strong cash flow, you can manage most situations, if it’s poor then you’re in trouble, regardless of how healthy the business is in other ways.

By ensuring that your business borrowings are moving things in the right direction, you can ensure your cash flow remains strong and your business secure.

Repayments That Work For Your Business

No matter how great the product is that you’ve taken, if the repayments don’t work in line with how your business operates, it will cause problems. For example, if your repayments remain static, but your business has busy and quiet times, then payments might be hard to manage during lulls.

If your business has a high production cost but takes a long time to get paid for their work, then taking on more work will make debt repayments hard to manage.

There are so many innovative products out there and they all work in different ways. Ensuring you’ve got the right one can give you a real competitive advantage over your rivals.

Reviewing your borrowing needs regularly ensures that you’ll get the best possible product for your business.

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