What is business loan refinance?
Refinancing your business loans in Canada involves replacing your existing loan with a new one that offers better terms, such as lower interest rates, more favorable repayment conditions, or access to additional funds.
Business loan calculations for 3 years (example)
| Amount, $ | Rate, % | Accrued %, $ |
| 500,000 | 10.00% | 77,083 |
| 500,000 | 18.00% | 138,750 |
| 500,000 | 29.00% | 223,542 |
| 1,000,000 | 10.50% | 161,875 |
| 1,000,000 | 18.50% | 285,208 |
| 1,000,000 | 29.50% | 454,792 |
| 2,500,000 | 11.00% | 423,958 |
| 2,500,000 | 19.00% | 732,292 |
| 2,500,000 | 30.00% | 1,156,250 |
| 5,000,000 | 11.50% | 886,458 |
| 5,000,000 | 19.50% | 1,503,125 |
| 5,000,000 | 30.50% | 2,351,042 |
How do I refinance my business loan?
Review the terms of your existing loan, including the interest rate, repayment schedule, remaining balance, and any penalties for early repayment.
Compare different lenders and their refinancing options. Look for competitive interest rates, favorable loan terms, and any associated fees. Consider both traditional banks and alternative lenders, such as online lenders and credit unions. Gather Necessary Documentation (profit and loss statements, balance sheets, tax returns, business plan, loan statements, identification documents).
Submit applications to your chosen lenders. You can apply to multiple lenders to compare offers, but keep in mind that multiple credit inquiries can impact your credit score.
Carefully evaluate the loan offers you receive. Pay close attention to the interest rates, loan terms, fees, and any conditions. Compare these with your current loan to ensure that refinancing will be beneficial for your business.
Select the loan offer that best meets your needs and provides the most favorable terms. Notify the chosen lender of your decision. Work with your new lender to finalize the refinancing process. This will involve signing the new loan agreement and any other required documents.
The new lender will typically handle paying off your existing loan. Ensure that the old loan is fully settled to avoid any complications. Start making repayments according to the new loan’s terms. Update your financial records and repayment schedules to reflect the new loan.
Be aware of any fees associated with refinancing, such as application fees, origination fees, or early repayment penalties on your existing loan. Ensure that the new loan offers a lower interest rate or better terms to make the refinancing worthwhile.
You can also see the similar FAQ about Canadian banks:
Details of companies offering the financial services:
Bank Of Montreal
Head office’s address: 119, rue Saint-Jacques Montreal, Quebec H2Y 1L6
Contact center: 877-225-5266
Phone: 416-867-5000
Web-site: http://www.bmo.com/main/personal
Swift code: BOFMCAM2
Stock code: BMO
BSB: 001
CIBC
Head office’s address: 199 Bay St, 44th Floor Toronto
Contact center: 800-465-2422
Web-site: https://www.cibc.com/en/personal-banking.html
Swift code: CIBCCATT
Stock code: CM
BSB: 010
CIBC
Head office’s address: 199 Bay St, 44th Floor Toronto
Contact center: 800-465-2422
Web-site: https://www.cibc.com/en/personal-banking.html
Swift code: CIBCCATT
Stock code: CM
BSB: 010