The short answer is that, yes, you can refinance a small business loan. Just like many types of loans and financial products, a business loan can be refinanced over time. Things change over time — whether it’s the market rates available, your business credit score, your business’s finances or other factors, refinancing a business loan can be a way to change the way your business loan is structured.
Keep in mind that while you can refinance a business loan, it’s not always advantageous. So make sure to do your research and gather the information you need to make the right decision for you and your business.
If you’re wondering, “How can I refinance my business loan?” you’ve come to the right place! Refinancing your business loan doesn’t have to be a complicated process. By following a few straightforward steps, you can adjust your small business loan to better fit your business needs.
Finding the right lender to refinance with can make all the difference when exploring your loan options. At mySMBscore we prioritize a prosperous financial future for business owners. With reputable lending partners, we can help business owners find the right lender to refinance their loan with, National Funding being one of those options.
Time is of the essence when it comes to refinancing your business loan. Whether rates are dropping or you’re buried in payments, the need to refinance can vary. From finding the right loan to refinance with to executing the process, there’s several decisions along the way. At mySMBscore we can help streamline the process with lending partners such as National Funding.
The ultimate goal of refinancing is usually to save money by locking in a lower interest rate. While there may be other fees associated with refinancing, you’ll want to look at the full picture before making any decisions. With that being said, in order for the decision to pencil, you’ll need the right lending partner with a competitive offer. Furthermore, you’ll want to ensure your business is in a good spot to apply for a loan. MySMBscore can help business owners understand their SMBscore, which can help them qualify for a business loan, as well as connect business owners with lending partners such as National Funding.
National Funding: With interest rates starting at 4.9% for business loan refinancing, National Funding has competitive rates for qualified borrowers. Working with my SMBscore you can position your business to qualify for lower rates, all the while accessing top lenders such as National Funding. We believe in the power of partnership, which is why we’ve created a space for businesses to work together united to achieve success together.
When you already have an existing business loan but are looking for different terms or conditions, you can go through the process of refinancing. How exactly does that work? Well, you’ll essentially take out a new loan to pay off your existing business loan. The new loan will (hopefully) have better terms and conditions, like a lower interest rate or longer repayment period, which will allow you to save money.
If you’re considering refinancing a business loan, it’s likely because you think you can get better terms or offers based on your current financial situation. Some of the common benefits of refinancing a business loan include:
You can use mySMBscore to see what kind of offers you might be eligible for and how refinancing your existing business loan could improve your business’s cash flow.
The decision to refinance your business loan can have an impact on your finances and credit journey. But the key is doing it at the right time. So when exactly is that? Well, there are a few ways to tell it might be a good idea to refinance your business loan:
When done at the right time, refinancing your business loan can really help your company’s cash flow and overall bottom line. Not sure when the right time is for your business? You can use mySMBscore to check offers from multiple lenders and see what kind of business loan rates you might be eligible for. That way, you can make the right decision based on real options.
If you have bad credit (either business or personal), you might be wondering if you can refinance your business loan. The answer is yes, you can - but it might be challenging. Lenders prioritize credit scores when making approval decisions, but there are still several financial institutions that will help businesses with bad credit.
If you’re struggling to get approved with your current credit score, you can use mySMBscore to get actionable advice on how to improve your score so you can qualify for more options.
Each lender will likely require different documentation when looking over your business loan refinance application. That being said, there is still a standard set of documents you’ll likely have to submit when you apply to refinance your business loan, including a business plan, different financial statements, tax returns, and any loan or debt statements.
The goal is for the lender to get a full picture of your current finances and confirm you’re in a position to pay back any loan that you’re applying for.
When it comes to any type of loan, there is no “typical” interest rate. Anyone who’s shopped for a loan knows that rates can vary wildly by your own qualifications, the lender’s requirements and the market rate. That being said, you could expect a range anywhere from 5% for the most qualified businesses but up to 30% for those with a limited credit history or poor credit score.
The only way to know what kind of credit score you can qualify for when refinancing your business loan is to compare your offers and start shopping around.
We know that time is crucial when you’re waiting to hear back on an application decision. While most online banks (and even traditional lenders, now) can provide fast approval in as little as a few hours, it will ultimately depend on what kind of refinancing you’re applying for, how fast you can submit the required documents for your application, and the speed your lender can process applications.
One of the goals when you refinancing your business loan might be to adjust your overall repayment period. When it comes to refinancing, the repayment terms will vary based on other factors like your loan amount, credit history and offerings from the lender. Some lenders can offer long repayment periods like a decade or more!
Small businesses looking to refinance a business loan can replace an existing loan or debt with a new loan. As you search for the new loan, you’ll want a (hopefully) lower interest rate loan with affordable payments. Credibly helps small businesses obtain business loans in the form of working capital loans, business lines of credit, and merchant cash advances. While Credibly is a direct lender, they also partner with other lenders to expand their offerings. To qualify businesses will likely need a minimum annual revenue of $300,000 and at least 6 months in business. Additionally, Credibly has a low minimum credit score requirement. Loans through Credibly have a factor rate, which is different from a simple interest rate. You cannot compare a factor rate to a simple interest rate without doing a conversion. Therefore, it may be challenging to compare Credibly loans with other loan offers, unless it’s factor rate to factor rate.
Credibly is best for businesses that are fairly new, although they don’t offer loans for startups. In addition, business owners with less than perfect credit may want to consider working with Credibly. Some of the highlights of working with Credibly include:
Fora Financial is a New York based lender that offers merchant cash advances and small business loans. Businesses can consider a loan from Fora Financial to refinance existing debt or access more cash in order to pay off existing debt. For example, by taking a merchant cash advance, you can access capital based on future credit card sales. With access to cash, you can allocate more money to paying down existing debt. This can replace the need for a debt consolidation loan.
Fora Financial is best for businesses in need of short-term working capital. They can also be a good choice for businesses struggling to qualify with traditional banks. Fora Financial has a low minimum credit score requirement of only 500 combined with a minimum time in business of only 6 months for term loans. While repayment periods for term loans max out at 15 months, short-term loans can help keep borrowing costs down. Similar to Credibly, Fora Financial offers loans with factor rates. Fora Financial offers some attractive perks such as discounts for early repayment and opportunity to increase funding after at least 60% of the original loan has been repaid. One of the biggest downsides of Fora Financial is they don’t report to the credit bureaus. This means the loan does not work to build business credit. Building business credit is important as it can help you qualify for loans down the road. However, if you need to take out a business loan, and are running low on options, it’s nice to know you may still have options available.
Some of the highlights of working with Fora Financial for a term loan include the following:
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