Refinancing involves using business assets like equipment, vehicles, and property to raise working capital. It is best done when planning business growth, acquisitions, new assets, or releasing equity. Proper preparation includes understanding timelines, costs, exit fees, and ensuring new facilities support business plans short and long term. A clear business plan outlining future objectives and finances makes refinancing simpler by demonstrating the need and use of funds to lenders. Independent advice can help evaluate if current facilities are suitable or if refinancing with a new lender would be preferable.

1. REFINANCE FOR BUSINESS EXPLAINED
Reference: http://www.yourchamber.org.uk/business-support/finance/refinancing-is-it-right-for-your-business/
http://www.investopedia.com/terms/r/refinance.asp // http://www.entrepreneur.com/article/203766
What is it?
You use
assets such
as machinery,
vehicles,
plant etc to
raise working
capital. Any
assets you
are going
to consider
refinancing
you must own
and have no
outstanding
payments on
them.
When is the the best time to
refinance?
The best time for a business to refinance can vary and
is determined by the business’ financial position. If the
business is planning to grow, to acquire a competitor,
to acquire new fixed assets or to release equity this will
influence the best time to refinance.
Top tips for successful
refinancing
Below are some helpful tips for successful
refinancing:
1. Understand the time it can take to refinance:
identifying banks and lenders, arranging meetings,
producing business plans etc.
2. Each facility has advantages and disadvantages
that need to be considered in light of your refinancing
objectives and the business’ plan for the future.
3. Know your exit fees (in terms of your business’
existing facilities and any new facilities being
considered as part of your refinance).
4. Make sure you are aware of all of the costs of any
new facilities including charges and commissions.
5. Know who will provide ancillary facilities, such as
deferred duty guarantees and BACS facilities.
6. Understand how much value should be given to the
working relationship the business has with a lender
compared to the pure financials.
7. Understand if the new facilities are sufficient to
support the business plan, both short and medium
term.
8. Know what happens if the business does not
perform to plan.
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2
3
What preparation is needed?
In preparation for refinancing, the business should have a
clear plan of its future, with defined objectives supported
by a financial plan. This business plan will allow the most
appropriate type of financing to be provided by the most
appropriate lender, be it a bank, an asset based lender or
some other source of refinancing. A business plan will make
the process of refinancing far simpler and quickly break
down any barriers to refinancing.
What else should I consider?
Seeking independent advice could also provide a view on
whether your business’ facilities are appropriate or whether
you should consider requesting different facilities with your
existing bank or lender and / or consider refinancing to a
different bank or lender.