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Business Loan - Refinance

Purpose

Refinancing involves replacing an existing loan with one of more favourable terms and/or to increase the amount borrowed. Increased loan funds can be used for any legitimate business purpose such as expansion, stock purchase and marketing.

Benefits

Opportunity to replace or increase an existing loan to grow the business or meet its working capital requirements. Borrowers can take advantage of current market offers such as lower interest, increase loan-to-value ratio and break-fees. If security is not required, business loans can be settled in less than seven days.

Security

Depending on the size of the loan and the lender, the loan may be unsecured or secured. If security is required, this may include accounts receivable, stock, plant & equipment, and goodwill, in which case the lender will register appropriate security interests over those assets. If the amount borrowed is more than 80% of the value of security offered, lenders may require Lenders’ Mortgage Insurance which essentially protects them in case of default. This will be an additional cost to the borrower. This means, if the borrower defaults in their repayments and cannot repay the amount owing the lender may compel them to sell the business and the real estate security to settle the debt in full and also call on any personal guarantees provided to support the loan.

Repayment terms

The borrower will be required to pay interest at a fixed or variable rate or a mix of the two on the principal outstanding and any agreed upfront, ongoing and exit charges. Business loans are flexible and can be repaid over a short or long term. Short-term loans can be for 3 months to 2 years and long-term loans can be for many years.

Process

To be matched with a Refinance Business Loan bidder, just follow our anonymous Business Loans/Refinance listing process.