Debt restructuring is a smart strategy to reduce loan costs and ensure a product to business fit. It may also be suitable for businesses at risk of default on their current loans, and can improve overall business cash flow.
DEBT RESTRUCTURING FAQ
There is no set reason that a business may look into restructuring their debt. However, debt restructure is an opportunity to look into the financial requirements and goals of your business, and ensure that your loan portfolio is appropriate to help reach those targets. Common reasons that businesses restructure debt include to: • Consolidate all debts to a single lender. • Access equity. • Free up cash and improve cash flow. • Access lower interest rates. • Improve the financial returns of the business through appropriate financial products.
Yes, in some cases it is possible to free up equity with debt restructure. A Lendfin specialist will be able to help you assess your business financial situation and determine whether accessing equity is a good strategy for you.
Yes! In fact, we recommend it. Whilst your business and personal loans will be kept as separate facilities, consolidating your entire portfolio to one institution allows you to quickly view your overall financial position. In certain situations, a large portfolio will allow you to access discounted rates.
Yes, it is often possible to reduce your overall interest rate through debt restructure. However, rather than simply reducing rates, debt restructure is a great opportunity to look at loan facilities that may help you achieve your business goals faster. For example, many business owners take out a business loan to purchase a vehicle, however, asset finance may offer greater tax benefits and improve cash flow.
Whilst it is best to restructure your business loans before a default occurs, it is not too late to take a look at your entire portfolio and restructure to help get your business back on track. If your business has recorded a default or is currently at risk, contact a Lendfin specialist as soon as possible to see how we can help you return to normal business operations.
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