2019 has not
been the easiest of years for many of our clients, the lengthy political and
economic uncertainty is making the general public think a lot more about
spending their hard-earned money. Small
businesses are having to renegotiate with their suppliers and look at all their
costs to ride the storm we find ourselves in at the moment.
Not ones to
sit down and wait for things to happen, this blog is about refinancing. 2019 may not
have been the best year, but let’s not sit and see if 2020 will be better. Now
is the time to review your finances. Autumn is a great time of year to look at this,
you’re halfway through the financial year, summer is over, and Christmas is
around the corner, the end of the year will be here before you know it.
So,
what is refinancing?
Refinancing
is the process of replacing an existing loan with a new loan. Typically, people
refinance so they can get a better deal on their current loan. For example, you
may be able to get a better interest rate than what you are on currently,
saving you money. Refinancing also depends on your credit score, current deal
and many other factors.
You may also
have some assets in your business currently tying up cash and want to get a
loan to put more liquid cash into the business, to allow you to put some plans
for 2020 into practise right now.
Why
refinance?
If you have
a loan or a mortgage, it is worth speaking to the provider for refinancing.
Some potential advantage of refinancing includes:
- Lowering your monthly payments. You can then put
to use your extra saving to pay off other debts or towards your saving goals.
- You can combine your debts into one with some
refinancing options. This is good so you know exactly when payments need to be
made.
- Usually able to negotiate lower interest rates.
- Cashflow is tight but you have some assets that
can assist you gain some cash to put back into the business.
Studies have
shown that trying to negotiate a better refinancing deal tends to save people
money and a lot of stress. Some questions to ask yourself is if you are paying
too much monthly on any equipment that you could possibly lower or if you are
too dependent on your bank overdraft as it is one of the most expensive bowing
methods. Knowing where all your finances lay can help you budget and with the
extra cash you can invest in yourself or your business.
Mortgages
are the cheapest form of loans, credit cards tend to be the most expensive. It may
be a time to sit down with your bank manager or even your accountant and look
at the best ways of saving yourself some interest along the way.
Typically,
business owners who plan ahead with their finances and put plans together not
only achieve their plans, but tend to be charged less by the banks for the privilege
of lending money from them.
So what are
you doing, get planning 2020 is going to be an amazing year, let it be a good
one for you.
