Anyone who knows the basics about MSME’s is aware of the fact that the major funding for them comes from loans. Debt refinance loan is one such aid that many are not familiar with. It can also be called the safety line in loans taken out for the support of MSMEs. Every business, whether budding or established will have both high and low tides. Thus we need a provision to provide a helping hand when they are being choked by the low tides in their business. This is when you need to consider debt refinance.
Debt Refinance Loans
In simple terms this means replacing a current debt obligation with another one, with a substantial difference in the terms, specifically under times of financial distress faced by the enterprise.
There are several reasons for taking out refinancing loans.
• To get a better interest rate.
• To combine debts and form a single one with an interest differential.
• It gives us a reduction in the monthly repayment amount.
• Reduction and alteration risk.
• To free up cash.
Typically a refinanced loan will have a lower interest rate.
Risks In Debt Refinancing
Look before you leap. There may be a few extra fees that would have to be calculated beforehand when concerned with applying for a debt refinancing loan, which are often overlooked. Also having a lower interest rate but a longer term of payment will result in the borrower being in debt for a longer time. But the amount to be paid at each repayment will be lesser.
Thus extreme care in calculation and finance management should be taken when SMEs apply for debt refinance loans. However FinanSME helps you out to effortlessly get a refinancing loan especially by providing you with expert financial advice.
The criteria for refinancing differ from country to country. There are several debt refinancing loans in India that are accessible to SME’s, also called debt consolidation. It is also highly advised to begin the process by seeking debt counselling, a fancy word for analysing the entire financial scenario surrounding an SME and providing a route of action based on the same.
FinanSME And Debt Refinancing Loans
SME’s are provided help on how to refinance their high interest rate loan with low interest bearing offerings, both secured and unsecured debts refinancing loans are offered. The main aim is to provide relief to the thinly stretched finances and provide the enterprise with much needed breathing space. Saving money otherwise spent on interest repayment and feeding it into enhancing the operational efficiency is one of the most enticing perks of these loans.
Further, multiple loans can be merged to form a single loan, taking a lot of pressure off the repayment, even if the term of repayment gets extended.
Benefits FinanSME provides include:
• Lowest interest rates coupled with the longest repayment periods
• Both online submission of application and submission via an agent.
• The documentation and other formalities to be covered are the bare minimum.
• The approval and disbursal of the loan all happens in a window of two weeks’ time.
If your SME is struggling under the load of debt in a period of financial crisis, turn to debt refinancing. If you are looking for debt refinancing FinanSME is your go to destination.