Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > A Guide to Refinancing a Small Business Loan

Loan for Business

A Guide to Refinancing a Small Business Loan

A Guide to Refinancing a Small Business Loan

When the going gets tough, a business loan can provide you with the necessary funds to keep your venture going. You can use the borrowed money to cover a wide range of expenditures and help your business flourish.

But what happens if you are not happy with the repayment terms and the interest rate associated with your loan? The solution to all your woes is refinancing! Keep reading to learn how to refinance your loan and achieve more favourable terms.

How can you refinance a loan for your small business?

Refinancing your loan allows you to reduce the overall cost of your loan by paying it off with a new loan. Simply put, you can transfer your existing loan to a new lender that can offer you better repayment terms and lower business loan interest rates.

However, while looking for a new lender to refinance your loan, you can also look for extra benefits to make the repayment process smoother and less burdening.

By refinancing your loan, you can:

  • Go for a longer or shorter tenure
  • Lower the business loan interest rates
  • Reduce the monthly EMIs
  • Improve your credit score
  • Increase the working capital

Additional Read: Difference between Short-Term Business Loans and Small Business Loans

How to refinance an existing business loan

Consider your finances

As a business owner, you must have a clear idea of your finances and your business’s financial health before you refinance the loan. To do this, check your credit score, net worth, balance sheets, and other relevant documents. You must also calculate the amount you owe and the time left in the current loan term. This will help you pick the ideal lender and loan terms for refinancing.

Decide your refinancing goal

The next step in refinancing smallbusiness loan is to have a defined set of goals. Why do you wish to refinance your current loan, and what are your aspirations from the second loan? Some common goals include reducing the monthly EMIs, increasing the capital, or changing the tenure to make the repayment more manageable.

Research and compare lenders

Remember, it is crucial to explore all your options before settling on one. Thus, it is recommended you research thoroughly to pick the right lender. Some of the factors you must consider are business loan eligibility, interest rates, repayment options, any hidden charges or penalties, and extra benefits.

Apply for refinancing

Now that you have chosen a lender and have found the right loan to refinance your loan, it is time to apply. Compile all the paperwork required for the application process, such as your identity proof, bank statements, tax returns, profit and loss statements, balance sheets, business proof, etc. Next, apply for the loan online or offline as per your lender’s policies and wait for approval.

Additional Read: Top Small Business Trends for 2021

The bottom line

Loan refinancing can be a wise move for your small business if you can get better interest rates and loan repayment terms on the new loan. So, if you’re ready to take the next step, visit Tata Capital’s website and peruse through our business finance offerings today.

Apply Now

Give Your Business the Right Boost: Apply for a Business Loan Today

Apply now
Popular Searches
business idea udyogini scheme hsn code full form low investment business ideas top 10 most successful businesses to start transport business import export business in india mineral water plant cost collateral free loans
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.