Is It Time To Consolidate Your Business Loans?
- Cover temporary cash flow
- Fund corporate expansions
- Hire new employees
- Procure new equipment
Loan Consolidation and Refinancing – Which One Makes Sense For Your Business?
When streamlining business debt, most executives have two options: consolidation and refinancing. Many people use the terms debt consolidation and refinancing interchangeably; however, there are some distinctive differences between these two financial vehicles.
What To Know Before Consolidating Your Business DebtConsolidating your business debt using a real estate loan or some other financing vehicle can offer better terms, such as fewer payments and lower interest rates. However, before moving forward with the process, it’s crucial to consider several key factors such as:
Current Interest RatesIf you currently have loans at a low-interest rate, consolidation (or even refinancing) may not be beneficial, especially if you’ll be borrowing at a higher rate.
Personal Credit ScoreEven though you’re leveraging a business loan, your personal credit score may still come into play. Your credit health can directly impact your interest rate.
Business ProfitabilityDemonstrating profitability and consistent (or even improved) cash flow can also help organizations qualify for a lower rate.
If you’re considering consolidating your current debt, Avid Commercial can help. Contact us today to hear more about our lending models to determine what makes sense for your business.