Replacing expensive or unsuitable finance with something that fits better
Businesses often accumulate finance over time. A loan here, a facility there, an agreement that made sense at the time but no longer suits the business. When multiple repayments are running at once, particularly at high rates, the combined cost can put real pressure on cash flow.
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Debt consolidation and refinancing is the process of replacing existing finance with new arrangements that are better suited to where the business is now. This might mean combining multiple commitments into one, reducing the monthly repayment, lowering the rate, extending the term, or all of the above.
Is this right for your situation?
When refinancing makes sense
Existing repayments are too high and putting consistent pressure on cash flow..
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The business is paying a high rate on finance arranged some time ago when options were more limited.
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Multiple separate agreements are creating complexity and cost that could be simplified.
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The business has grown or improved its financial position and is now in a stronger position to negotiate better terms.
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An existing agreement is coming to an end and there is an opportunity to restructure before renewing.
When refinancing is not the right answer
Refinancing is not always straightforward, and it is not always beneficial. There are a few important things to consider.
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Early repayment charges on existing agreements may make refinancing more expensive than it appears.
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Extending a term to reduce monthly payments could mean paying more interest overall.
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If the underlying business position has deteriorated, lenders may offer less favourable terms than currently in place.
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Consolidating short-term debt into a longer-term loan can increase the total cost significantly.
We look at the numbers carefully before recommending this route. The goal is to improve your position, not just to make it look simpler on paper.
What does the process involve?
1. Understand where you are now
We start by understanding what existing finance is in place, what it costs and what your repayment obligations are.
2. Explore options
We then look at what is available in the market and whether the numbers support a refinance.
3. Present the case
If they do, we package the case properly and approach the right lenders.
​Full transparency about what is already in place is essential. Lenders will find out what commitments exist during their assessment. It is far better to disclose everything upfront so the case can be positioned properly.