|
Refinancing Existing Loans Equals Big Savings
Business owners are struggling to find new ways to save their business, cut expanses or grow. Laying off employees only hurts operations. Trying to get better terms from vendors or suppliers who are
Go to Web Site
|
|
|
|
Everywhere businesses turn these days, they are inundated with information about how they can reduce expenses or save on costs as the country struggles in getting out of this recession.
We get bombarded with advice like renegotiate with suppliers and vendors, strip your company down to its most basic operations, outsource or even layoff employees. These are a few of the many things that businesses are dealing with each day in order to survive or grow.
All of this in the face of lenders reducing the availability of credit or even closing or reducing current loans and lines of credit for small businesses. Or, in the face of no lenders really funding start up businesses.
To that note, there is another option that I would like to throw out there – one that I think makes much more sense than laying off employees or reducing services (which only make current customers mad and makes it nearly impossible to get new customers): Think re-financing for better rates and terms.
A lot of business owners only think about refinancing current loans when those current loans are in danger of default or if balloon payments are coming due. Many business owners just seem to forget about the loan as long as they keep making regular payments – it is kind of like thinking “if it ain’t broke …don’t fit it” - especially since it is such a pain to approach banks and other lenders and go through that whole loan process all over again. But, refinancing your loans or other debts can not only save the business money today and for the remaining length of the loans but could better position it for future financing.
Further, the problem with this thinking is that you could be missing out on a great opportunity to save you company a tremendous amount of capital as well as positioning your small business for new growth opportunities that will emerge as the economy turns around. Plus, why not fix it now before it does break and no lender will be willing to help you!
Moreover, if you are fearful that your current lender is getting ready to pull the rug out under your feet, you can pre-empt that with a re-finance.
Proper financial management comes from always keeping an eye out for new opportunities. With this current, extremely low, rate environment and more financial companies looking for new customer growth – there is no better time to refinance your current business loans! This does not only mean refinancing your commercial mortgage loan or working capital term loan but also those loans and lease on your equipment.
Think about this (a simple example):
18 months ago, you took an equipment loan for $80,000 at 8% for 5 years. Today, you could refinance that same loan at 7% for the same 60 months and save nearly $500 per month. That is $500 per month that can go to meet other business expenses, take advantage of new growth opportunities, reduce debt-to-income levels for future loan requests, save employees jobs, etc, etc, etc.
While no single management decision will save your company in one shot, in combination all of these items (cutting costs, squeezing more out of current customers or and refinancing debt) will definitely lead to huge saving and new opportunities – now and into the future.
|
|
|
|
|
Copyright © 2003 - 2012 URL.biz. All rights reserved. |
|
