Simply Business Loan

Menu
  • Home
  • Types Of Loans
  • Lenders
  • Applying
  • Avoiding Default
Home
Applying
What Is Refinancing When It Comes To A Small Business Loan?

What Is Refinancing When It Comes To A Small Business Loan?

Lilli Lylac April 21, 2025

What Is Refinancing When It Comes To A Small Business Loan?
Refinancing is when you apply for another loan with a lower interest rate and longer repayment term compared to your current loan. Most of the time, refinancing is done to consolidate your current loans, like credit cards and lines of credit. Or it can restructure one larger loan. This will give your business more flexibility as the repayment amount will be lower from now on. Refinancing will lengthen the term of your loan though. This can be done even if your current loan has not yet reached its maturity.

Reasons to Refinance

Low-interest rate
Reduce monthly payments
Locking in low interest rate
Cashouts
Avoiding balloon payments.

Types of Loans Eligible for Refinancing

Not all business loans can undergo refinancing. Here is the list of loan programs eligible for refinancing:

Term loans
Microloans
Working capital loans
Equipment loans
Real estate loans
Business lines of credit
Merchant cash advances

Refinancing Rate and Terms

The objective of refinancing is to ease off repayment rates and to have an extended loan term to have a much lower repayment scheme. If you are going to refinance, make sure that interest rates are lower than your current rates and the loan term is longer. This will get you the lowest amount of repayment every billing cycle.

Listed below are the ideal parameters of refinanced loans:

1. Bank refinancing rate- 5-10%
Bank repayment terms- 1-10 years

2. SBA 7(a) refinancing rate- 4.5- 6.5 %
SBA 7(a) repayment term- 7-25 years

3. SBA 504 refinancing rate- 4.5-6%
SBA 504 repayment term- 10-20 years

4. Alternative refinancing rate- 9-50%
Alternative repayment term- 4 months to 5 years

Is Your Business Eligible To Qualify For Refinancing?

Similar to other loans, refinancing has certain requirements and it may differ from one lender to another.

CuraDebt

Common requirements are the following:

High credit scores
Annual revenue
Business time
Some factors may cause problems in refinancing a loan:
Poor credit score
Bankruptcy filing
Not enough time doing business
Not meeting your annual revenue

Refinancing is not as simple as it may seem. Although the idea and purpose of it may look like it may not affect anything, it can actually prolong the hardship of the borrower in repayment of their debt. It can also affect your future loans. Because lenders know the purpose of refinancing, this may cause your credit score to go down. Also, fees for processing and surcharges will also be charged.

The benefit of this is that you can consolidate your current loan through the proceeds you receive with refinancing, thus reducing the load of debts and you can still pay it off earlier than the projected maturity date to save you even more money and effort. It’s very important to pay off your loan before its maturity date, as that will save your business tons of money that would have been paid to the lender in interest. What is important is to be sure that refinancing will help you rather than be a burden to you. Here are some points that you may consider:

  • Your goals for receiving a new loan
  • Fees and costs of refinancing your loan
  • Business and personal credit score
  • Credit report
  • Requirements for collateral and personal assets
  • Rate and terms of a refinance loan

Be careful before considering and compare wisely.

Prev Article
Next Article

Related Articles

Coronavirus Stimulus Package: Applying For A Business Loan Amid The Pandemic
Running a business sure is hard work. Aside from keeping …

Coronavirus Stimulus Package: Applying For A Business Loan Amid The Pandemic

What Are The Requirements To Get Your Small Business Loan Approved?
Business loans given by lenders or banks are the financial …

What Are The Requirements To Get Your Small Business Loan Approved?

About The Author

Lilli Lylac
Lilli Lylac

You are in great hands with Lilli. She has actually been involved in financing for many years and still loves helping people achieve their economic goals. If you are thinking of applying for a small business loan, you are in the right place to gain insight and tips for the road ahead. Good Luck!

Leave a Reply Cancel Reply

Insider Weekly Free Report
Insider Weekly Free Report

Recent Posts

  • Getting a Business Loan to Start a New Business After Bankruptcy
  • How To Prepare A Business Loan Application For The First Time
  • Understanding Types Of Business Loans
  • Useful Tips For Getting A Small Business Loan
  • What Is An SBA Loan?
  • How To Choose A Business Loan That Fits You
  • What Are The Requirements To Get Your Small Business Loan Approved?
  • Never Miss A Deadline!
  • Things To Consider Before Applying For A Business Loan
  • Top SBA Lenders for Loan you should know
  • Coronavirus Stimulus Package: Applying For A Business Loan Amid The Pandemic
  • What Is A Microloan?
  • 5 Tips For Repaying Small Business Loans
  • What Are Types Of SBA 7(a) Loans?
  • Small Business Loan Companies in USA

Categories

  • Applying
  • Avoiding Default
  • Home
  • Lenders
  • Types Of Loans

Simply Business Loan

Recent Articles

  • Getting a Business Loan to Start a New Business After Bankruptcy
  • How To Prepare A Business Loan Application For The First Time
  • Understanding Types Of Business Loans
  • Useful Tips For Getting A Small Business Loan
  • What Is An SBA Loan?

Categories

  • Applying
  • Avoiding Default
  • Home
  • Lenders
  • Types Of Loans
  • PRIVACY POLICY
  • FACEBOOK
  • TERMS & CONDITIONS
  • DMCA
  • CURATION POLICY
  • CONTACT
  • Opt-out preferences
Copyright © 2025 Simply Business Loan

Ad Blocker Detected

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

Refresh
Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage {vendor_count} vendors Read more about these purposes
View preferences
{title} {title} {title}