Are you an aspiring entrepreneur? Are you sure that your idea is bound to grow into a flourishing business? Or have you taken the plunge already and are now looking at a viable expansion? If the answer is yes, then a business loan is what you need.
Loans for business emerge as messiahs at critical junctures of your journey, offering ready financial assistance. Moreover, there are different kinds of business loans based on specific requirements; such as working capital loans, term loans, equipment financing, and inbox financing.
What Does Refinancing Mean?
Refinancing a business loan means revising the interest rate, payback schedule or terms of an already existing loan agreement. What this translates into is you repaying a loan in full with the capital from another cheaper, long-term loan. For the latter, you should look for extra benefits like smaller and frequent payments or a lower annual percentage rate. The bottom line is to make repaying business debts a smoother and less burdening prospect.
Intrigued? While this might sound cumbersome at first. Over a period of time, you could find yourself eligible for lower interest rates or revised terms as your business grows. In such a scenario, refinancing becomes an excellent option to clear debts at your convenience.
What are the Benefits of Refinancing?
1) Lower Interest Rates
A lower interest rate significantly reduces the monthly payment on the loan.
2) Increased Capital
A direct consequence of reduced monthly payment is more working capital in hand.
3) Debt Consolidation
Refinancing can consolidate multiple debts at one place, saving you the hassle of repayment towards several loans.
4) Higher Credit Scores
Credit utilization score is reduced, which is the amount of debt against the total available amount of credit. The lower this ratio, the higher is the credit score.
How to Refinance a Business Loan?
1) Set a Goal for Refinancing
It is crucial to identify why you want to refinance your business loan in the first place. This helps pick the ideal loan. Some of the common goals include reducing monthly payments, annual percentage rates or cost of capital and making payments easier.
2) Re-look at Your Finances
Reviewing the financial records of your business before applying for refinancing will give you a clear idea of how likely it is to be approved. Make sure that your profit/loss statements, balance sheets, bank statements, credit scores, net worth and tax returns are in order.
3) Choose the Right Lender
The lender will decide the terms of your loan, so choose wisely. Tata Capital offer unsecured, customizable business loans which you can pay back every month as it best suits your company’s cash flows.
4) Apply for Refinancing
The application for refinancing business loans is quite simple and requires minimal documentation. Tata Capital only requires you to submit a photo identity proof, bank statements and any kind of business proof. All you have to wait for is a quick online approval.
Tata Capital has basic standards for business loan eligibility, making it very easy to avail unsecured business loans up to Rs. 50 lakhs. If you are between 25 to 65 years of age and own a business with cash profits in the past two financial years, you are eligible for a business loan or a business loan for women. Do not let monetary troubles get the better of you and choose to refinance today.