Interest rates are coming down – time to refinance?

Getting the right deal could free up more cash where you need it

For many businesses, their borrowing is a patchwork of products. Interest rates have been high which makes borrowing expensive, and prudent business owners have been careful not to overstretch themselves by borrowing more than they need. 

At Swoop, we also advocate looking at some of the niche and specialist borrowing products on the market which could suit the needs of businesses better than a traditional unsecured loan. 

With interest rates falling, however, consolidating all those debts into one loan at a lower rate can achieve two things: first, it can simplify your outgoings by putting all your debts onto a single line of the accounts; second, it could save you money and free up capital for other projects. 

Ed Brown, Commercial Funding Manager at Swoop, says that consolidating outstanding debt within a property purchase (or remortgage) is becoming more attractive as the market shifts: 

“Lender appetite has really bounced back recently with some banks pledging to increase the number of commercial mortgages they agree by as much as 20 percent. Even during the uncertainty of the last couple of years, property ownership has made sense for some, but as interest rates go down, we are likely to see more businesses exploring this as an affordable and desirable option.”

Lower interest rates affect the whole market, not just commercial mortgages. And with the boom in challenger banks and digital first products, the battle for market share is getting more fierce – with lenders often prepared to squeeze their margin rather than lose a potential customer. For businesses wishing to consolidate existing borrowing into a single loan product, this is good news: there are lenders willing to be flexible and offer competitive prices to customers.

What are the advantages of restructuring your debt?

First, see much more clearly how much debt is costing your business. This enables you to make plans, much more easily, knowing exactly how much money he will have in your account.

Restructuring your debt with a lower interest rate will also enable you to save money, or you might opt to repay over a longer term – which will give you better cash flow day-to-day. 

If you make the right decision, you can find yourself with simplified accounts, and more money in your pocket.

Ed Brown says:

“It pays to know your options. The fact is that there are more lenders looking for your business than ever before. You can leverage their appetite to push for a lower interest rate, longer loan term, or reduced fees.”

If you are thinking about restructuring your borrowing but aren’t sure where to start, get in touch: Swoop’s friendly experts will help you reduce your costs, get the best deal possible and achieve your financial goals.