Businesses are looking at different ways to keep their cash in the bank but not many are aware of the different funding options available to them.
Debt consolidation allows businesses to refinance/ restructure their loans into a loan that has a better rate or loan term, making the repayments smaller.
This way businesses can use that extra cash and invest it back within their business.
What are the main reasons businesses use Debt Consolidation?
Businesses can use debt consolidation for many things such as:
- Releasing cash – i.e. getting more money for growth
- Reducing monthly payments to improve cashflow / working capital
- If your unable to make repayments
- Bank manage away
- Insolvency or full restructuring
A bank manage away is when the bank pulls out of certain sectors, if your business falls under this sector the bank might ask for you to pay back your loan in full. You can combat this with Debt Consolidation, taking out a new loan with better interest or term rates and using it to pay back the bank.
What options are available?
As a commercial finance intermediary, we have the ability to look at your current lending and see what options are available for your business. The loan that you’re currently paying back might not have the best interest rates or repayment term and there could be a better option out there.
It’s important to know that if you have taken CBILS over 48 months, a 60-month term with full 12-month holiday, that you might benefit from refinancing this loan. An RLS is taken over 72 months and as such adds 50% onto the repayment term, dropping repayments.
If you have any type of loan or borrowing, we always recommend speaking to a commercial finance advisor. They will be able to look at your current borrowing and let you know what options are available. The loan you have might have been the best at the time, but new options might now be available.
If you want to know more about your options, we are always happy to help, the ABL team is available on 01274 965356 or drop us an email.
If you want to find out further information about this topic you can get in touch with Chloe via email or call her on 07747 548 131 to talk through your options.