Consider Refinancing

When To Consider Refinancing

Posted: October 13, 2018

Early Pay Off

It is obvious that a business owner should refinance after he or she has paid off a loan and is ready for a new one. Did you know that you can pay off a loan early and immediately reap the benefits of that new found trust? Your competitors probably already know that. Most big businesses can absorb the cost of an expensive business loan. They use a simple math equation involving the part, rate, and base. The base is your monthly bank average, the part is the loan amount, and the rate is the percentage of interest on the loan.

Tricks of The Trade

Did you know that you can use the financial information from your last paid off loan to negotiate a better deal in the future? I'm going to tell you a simple trade secret. Most big businesses try to refinance right before or after tax season because they can hide a loss of profit or show a gain in profit for the same savings. Your competitors will divide the interest on their loan amount by their monthly bank average then, multiply the sum by the amount that they borrowed and thats how much money they should save from the maximum amount on the next deal. This is typically called leveraging risk and is applied to early loan payments.

For example; if you are paying back $15,000 and borrowed $12,000 then, the interest is $3,000. Lets say your monthly bank average is $20,000 a month. Divide 3,000 from that and you get 0.15 (the amount saved). If you multiply that by 12,000 (the amount borrowed) you get $1800. This equation is simply a mitigated risk assessment. Because you can prove financially capable of paying off the business loan at an earlier date than required your risk has lessened and your rate should improve. Incrementally if you keep raising your monthly bank average you should save more on every successful funding.

Best Times of The Year for Refinancing

During Tax Season - Underwriters and Lenders typically love to fund business loans before the company files their taxes. Another good time is after taxes have been filed they also like funding business owners during the begining of the fiscal year. A word of caution, you should not apply for a business loan during holiday seasons. It goes without saying that it may take a longer time for approval since the underwriters may already be vacationing.

Mid Summer - Maybe its the heat or the day dreamimg but, approvals tend to be more in volume during the summer. Theoretically, the good weather tends to put people in a better mood and this includes underwriters. The summer is also during the middle of the fiscal year. Although underwriters tend to scutinize more during the summer, they're also more susceptible to negotiation because they may have certain quotas to fill. Lenders genrally have a certain amount they must fund for the month.

Tricks of The Trade

Syndicate Lenders specialty is finding the best deal to suit your needs. We find ways to get you funded even if through unconventional means. If you don't think you qualify find out now for free. Click Here and get a quick quote without any obligation. Please note that it is only an estimate and does not actually reflect a deal.