Refinancing Your Company

Refinancing your company is an option to be considered, particularly if your business is suffering financial stress, cash issues and a reduction in profitability. The important thing is to recognise and take positive action to establish the most suitable funding solution that will both raise the required capital and provide stability for future trading.

It is advisable to seek professional help and guidance on the various sources of finance available as availability, terms and implications may vary considerably.

Company Refinancing Options

There are a variety of company refinancing options to consider. The following list gives a brief explanation of a number available:

Business overdrafts

A flexible short-term borrowing solution giving instant access to funds tailored to suit your business needs. Interest charges commence only when the overdraft is utilised, usually charged at a variable rate linked to the Bank of England Base Rate.

Business Loans

Primary advantage is that less interest may be paid than on an overdraft if the loan is taken out for a long period and at a set interest rate, which may help when a company is struggling to pay creditors or capital is required for expansion plans.

Factoring

Access up to 90% of cash tied up in unpaid invoices in as little as 24 hours, with no requirement for you to deal with the sales ledger, credit control and collection.

Discounting

Like factoring, release money tied up in unpaid invoices where you manage the process of processing payments.

Spot/Selective Finance

Raise finance against individual invoices. No requirement to enter into a lengthy contract yet still gives speedy access to working capital.

Asset Refinance

Refinance existing machinery, releasing tied up capital from asset value. Subject to the asset value it can be considered low risk from a lenders perspective which may enhances approval rates.

Trade Finance

Fund a business’s supply chain or raise funds to import stock into the UK. Purchase goods on an order with no need to use the business balance sheet as security.