When is the Time to Refinance Commercial Loans?

by : Gracy Bonsu



Businessmen usually borrow money for long periods. Since the nature of business requires a long term investment, it becomes important for a borrower to seek long term financing. At the same time, it is very true that you cannot predict the market behaviour over a long period of time. The fluctuations in the interest rates do keep on taking place.

If you have taken a loan when the interest rates were high then you are losing money because of the prevailing low rates. In such situations, the solution lies in refinancing a loan so that you get the benefits of lower interest rates. This is the right time to opt for refinancing. Besides, you can also seek this remedy to change the terms and conditions of your loan plan as you may no longer be comfortable with them after few years.

If your existing lender is willing to refinance your commercial loan, it is fine. Otherwise, you can opt for commercial loan refinancing from a new lender in the market. After all, your interests should not be subjected to the whims of a caprice lender. There are several benefits of this commercial refinancing. They are as follows:

1. Reduction in your four-weekly installment: If a commercial refinance is correctly done, it will definitely reduce your four-weekly instalment by minimum of few hundred pounds. This reduction will ease some financial burden from you and at the same time you will be able save some money. However, you should correctly do all the calculations before deciding for such options.
2. Can bring more flexibility: At the time of taking commercial refinance, you can increase or reduce the number of payable instalments. Depending on your present financial conditions, you can increase or reduce the number of instalments.
3. Can convert adjustable loan to fixed loan: Similarly, at the time of commercial refinance you can also convert the adjustable loan to the fixed rate loan. By doing this your repayment tension will definitely come down. Thus, you will not require worrying about the future rates and you will have to pay a fixed amount per month.
4. Consolidate your debt: The one more benefit is that you can consolidate your entire debt burden and get relief from burdensome interest payments.

The facility for refinancing commercial loans is available with many lenders in the UK. You should try to make most of this opportunity, but not before you have assessed the situation rightly.