Five Reasons to Refinance Your Business

What drives small and medium-sized businesses to seek refinancing, and why US Capital Partners is able to provide optimal refinancing for your company quickly and efficiently.

Refinancing existing loans or equity is one of the main reasons businesses seek funding. According to a recent survey by Pepperdine University, refinancing was the number one reason among smaller businesses indicating high or extremely high expected demand for new external financing in the coming six months.

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Five Reasons for Refinancing

What prompts small or medium-sized businesses (SMBs) to refinance existing loans? Here are a few common reasons:

  1. The bank decides unilaterally to call in a business loan early or reduce availability, even if the business is doing quite well. This may be part of an effort by the bank to shrink its commercial loan portfolio, often as a result of increased regulations in bank lending.

  2. The bank’s terms simply become less favorable for a business (about 11% of small businesses reported this last year).

  3. A company’s existing loan structure prevents the enterprise from being able to secure additional financing to fund growth or pay its rising bills (see example).

  4. A company undergoes some temporary difficulty and inadvertently breaches a loan covenant, prompting the bank to put the company into workout (see case study).

  5. Following several years of sustained growth, a company may be in a position to transition back from an alternative lender to commercial bank financing, with the aim of lowering interests costs and increasing availability (see case study).

Getting the Best Possible Refinancing

When it’s time for SMBs to refinance their loans, they may not always know where to turn to get the most suitable financing. In many cases such businesses fall outside the criteria for traditional bank lending. They may not always understand how they can leverage their tangible and intangible business assets to secure financing, or how to structure their financing in an optimal, cost-effective way.

As a direct lender, arranger, and co-lender, US Capital Partners is able to provide affordable refinancing for your business across multiple asset classes quickly and efficiently. Often, US Capital Partners is able to increase availability through the discovery of credit enhancers and ways to mitigate credit risks. As your smaller business grows, US Capital Partners can transition your company back to commercial bank financing, if this is appropriate.

To learn more about US Capital Partners, email Jeffrey Sweeney, Chairman and CEO, at or call +1 (415) 889-1010.

Jeffrey Sweeney