Refinancing Your Small Business; Is It A Good Time?

Nov. 19, 2009 - PRLog -- With the economic climate fluctuation now the interest rates of the commercial financing are hovering at a record low level while making it just the right time to consider refinancing your small business to beef it up.  Now paying off the current small business loan, with a new loan to consolidate your debt at a much lower cost is considered as a helpful means in increasing your cash flow. To make profit, refinancing is therefore the need of the hour especially amidst this uncertain economic scenario.
However prior determining that whether or not this is an opportune time for you to avail refinancing, first try to identify your refinancing goals. You refinancing goal can vary and a loan generally is subject to the changes based on the predetermined indexes like the floating or the fixed loan rates. The fixed loan rates are especially helpful for the entrepreneur who wants to avoid the chances of paying higher because of the adjustable loan rates.
Let us face it – rates, fees, conditions and loan terms usually vary by bank.  However it is important to set the goal and once you set the goal, the following are a few good guidelines which will help you in determining the optimal timing for refinancing your small business loan.  
Current commercial loan rate: Consider your current commercial loan rate and if you think that the loan rates are lower than your current interest rate, even atleast by one point then it is good time to consider refinancing.
Your business plan:   Reviewing your business plan that how long you wish to keep your business will help in determining whether or not to opt for refinancing. If you plan to keep your business running long enough to recover the refinancing cost then it would be a sensible idea to refinance your commercial financing.
Equity:  If you have equity in your business then it puts you in a favorable position for obtaining a much better loan rate.
Review your credit score:  The fact is, now a day lenders are looking for favorable credit scores. Quite ideally therefore to strike the best deal prior refinancing your commercial loan, review your credit reports and try to resolve negative issues if any.
Talk with your banker: Prior refinancing contact your banker to have added knowledge about current loan rates, loan options which are available for refinancing your small business financing. Contacting your banker will also help in reviewing your position while obtaining an optimal commercial financing for your business requirements.
After assessing all the above mentioned points if you feel that refinancing your commercial loan is indeed a good idea then your next step is to update your business plan prior you meet the lender for meeting your refinancing needs.
Browse through http://www.baycolony.org, to have further details

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