Since the recession, a growing number of banks refuse to secure small business loans, leaving a growing number of small business owners to find alternative ways to finance their startup companies. For many, the alternative has been using credit cards — a short-term finance option — to cover long-term business investments, resulting in more business owners finding themselves too deep in debt to grow their company. If you’re in a similar situation, it might help to know you can refinance business debt, which has several benefits.
It Could Improve Your Credit Score
When you consolidate your business credit card and any other short-term debt, the result is often a better credit score. This is because the consolidation reduces your credit utilization ratio. This ratio is how much credit card debt you have in comparison to your available credit, and it can affect your credit score by up to 30 percent. By lowering the ratio, you’re lowering the percentage of your score affected, resulting in a better number.
You Will See Lower Interest Rates
High interest rates leave you paying off debt for a longer period of time. If your interest rate is 10 percent and you have a monthly payment of $1,000, only $900 of the payment goes toward the actual loan amount. When you refinance business debt and decrease your interest rate percentage by even a few points, it adds up to the ability to pay your loan off sooner.
You Can Focus on Your Business
When you have short-term debt, slow sales or clients who are late to pay could leave you worried you won’t have your monthly loan payment. Because refinancing consolidates your debts into one long-term loan, you will have a lower monthly bill, leaving you with more working capital to put toward payroll, inventory or other important business necessities.
It Is Easier to Track
Maybe your company has been staying afloat with the help of multiple credit cards and merchant cash advances. If so, you probably realize the stress involved with remembering multiple payment amounts and due dates. When you refinance, you will only need to keep track of one payment amount, one due date and one interest rate, leaving you with time to focus on more important things.
If you’re tired of watching your business — and by extension, you — drown in debt, it’s time to find a solution. Refinance business debt to keep your head above water and gain the ability to further grow your business.
**JOKE OF THE DAY**
An Irishman, Englishman and Scotsman go into a pub and each order a pint of Guinness. Just as the bartender hands them over, three flies buzz down and one lands in each of the pints. The Englishman looks disgusted, and pushes his pint away and demands another pint. The Scotsman picks out the fly, and takes a long swallow. The Irishman reaches in to the glass, pinches the fly between his fingers and shakes him while yelling, “Spit it out, ya thief! Spit it out!”
ADM Financial Group is available to answer all of your concerns and assist you with financing options on commercial properties. Our underwriting is based primarily on the equity in the property, although a good credit record or strong financial statements will lead to a lower rate and a smaller loan fee.
ADM Financial Group provides alternative financing solutions for borrowers who have been turned down by the bank for a traditional loan or for those who need cash quickly. When it comes to receiving a commercial loan, banks should not have the final say. ADM Financial Group is a trusted provider of loans for business owners, investment property owners / buyers, and rental property investors in need of commercial financing. Whether you need funding to a single-family rental property or for a spacious multi-family unit property in your thriving community, we have commercial real estate loan programs tailored to your aspirations. Whatever your commercial real estate goals, we want to help you achieve them.
ADM Financial Group has some of the most flexible terms to help businesses get a Commercial Mortgage Loan that meets their needs effectively. Get in touch with us to find the most business-friendly mortgages in the industry today.