Why refinance, and when is the right time to do it?
Refinancing can offer many benefits – some purely financial, others strategic, and some emotional. It can be a great way to take advantage of lower interest rates, or to lower your monthly repayments over a longer term.
Changing market conditions can mean your lender has a change in its appetite for credit – where it once had been eager to lend you cash, it is now refusing to advance funds. In this case, you could refinance with a funder with a higher appetite for risk, or one that better understands the nuances of your industry.
You may wish to consider refinancing when buying new equipment or changing your business structure. Periods of growth in your business can be very demanding financially.
Conversely, if times are tough and repaying debt is proving to be challenging, refinancing can allow your debt to be restructured with a less aggressive repayment schedule.
A change of ownership in your business or succession planning is also an ideal time to assess the need for a refinance.
If your lender withdraws from the market you should also look at refinancing your assets with a new lender – possibly one that specialises in your sector and understands the particular cycles your business goes through. At Finance New Zealand we regularly work with more than 20 funding partners and are up to date with the different lending criteria and appetite they each have.
To assess where your business funding might fit should your funding circumstances change, talk to your Finance New Zealand business partner. We are happy to discuss the advantages that come with refinancing, as well as the best time to do it.