Whether you're facing rapid growth, dealing with seasonal sales fluctuations or looking for additional capital, refinancing your debts may be a good option to help you reach your goals.
Simply put, refinancing enables you to restructure your debts to obtain better payment conditions. You can also leverage your assets to obtain more working capital. Because of its wide range of applications, it can benefit successful companies as much as those in difficulty.
Analyze your financial situation
Before you consider refinancing, the first step is to look carefully at your balance sheet and cash flow statements to see how much debt your company has and how much it’s costing you.
If you have a cash-flow problem, you need to show how you plan to avoid a recurrence of this situation. Present conservative financial forecasts to include different scenarios, i.e., best-case and worst-case.
Remember that refinancing is only one of several options when evaluating your financial situation. Depending on your needs, equity financing, growth and transition capital or a term loan might better suit your business.