Taking out a high-interest business loan or a merchant cash advance may keep your business going when you’re short on funds, but it leaves you with ongoing, variable payments that can cause big headaches in the future.
Assessing your overall debt can tell you if your business meets the criteria for refinancing to end your financial nightmares.
When most of your money is going toward paying off debt rather than moving the business forward, refinancing can help free up cash by lowering the total amount you owe each month.
Use the resulting savings to invest in growth or to help pay down other types of debt so that you have the working capital you need to run a healthy company.
Refinancing is only beneficial if you anticipate being in business long enough to pay off your new loan. Otherwise, you’ll find yourself with a burden of debt that you might not be able to handle.
There will also be additional charges that you’ll have to recoup over time, and closing up shop before you can recover those payments could mean big losses.
Determine if your business has a solid enough future to support refinancing and if updating your loan terms will help with continued growth.
Application fees, fees for ending current loans and other payments associated with refinancing can compound quickly, sometimes to the point where the process winds up giving you little or no benefit.
Restrictions on new loans, including limits on how much of the money can be used for particular expenses, further complicate the issue.
Thoroughly research all of the potential pitfalls involved in refinancing before agreeing to new terms.
The initial infusion of money from a merchant cash advance may have been just what you needed at the time, but afterward you find yourself crippled with ever changing monthly payments that drain your budget and make it impossible to move forward.
Refinancing with a business loan from ARF Financial that has a lower interest rate and longer terms can free you from what might otherwise become a never-ending cycle of borrowing and making payments.
If you’re not sure if refinancing is right for you, contact us today to speak with a business loan consultant. We can help you determine what’s best for your business, and get on track to paying off your debt! The consultation is free and we may be able to save you thousands!