‘Unprecedented’ is a description which we have come very used to hearing over the past few months. First it was in relation to the long-running drought, then it was the bush fires and now we seem to hear it every day in relation to the coronavirus global pandemic. Unprecedented has become the new normal and if you believe the narrative, we need to get used to this changed existence.
While the initial focus was on the health aspects – shoring up the health system and implementing measures to supress the spread in Australia – attention was quickly turned to the economic impacts that these measures were causing.
Businesses have been impacted on a large and increasingly wide scale. But some sectors have continued to trade virtually ‘as per usual’ throughout and others look set for an uplift as part of the recovery strategy.
Whatever the situation, most astute business operators are assessing and evaluating their financial positions to mitigate risk of future impacts, redirecting resources where needed, altering strategies to conserve the existing business structure and positioning themselves to take advantage of opportunities as they arise in the future.
For many refinancing is a key strategy in their plans.
Explainer
- Interest rates are at historic low levels which makes re-financing existing loans a very attractive option for many businesses.
- For those with multiple loans, consolidating debt into one finance contract may free up cash flow for investment and general operations.
- Refinancing can involve establishing a new finance facility or loan contract for an existing loan or consolidating multiple debts/loans into one.
- The general process follows similar steps as establishing a loan. Your Jade consultant will discuss your requirements, source a quote from our wide range of banks and lenders and on acceptance of that quote will handle the paperwork to finalise the application.
- Refinancing may be with your existing lender or a different lender.
- Refinancing may involve changing to a different finance facility or remaining with the same product type. That is, changing from leasing to Chattel Mortgage or staying with leasing.
- Refinancing involves establishing a new loan term and new monthly payments at a new interest rate.
- The same conditions applying to individual product types, eg GST, tax etc, apply to the new finance.
Considerations
- The costs involved with re-financing should be considered.
- Break fees may apply for finalising your existing loan(s) before the end of the loan term. Your Jade consultant will negotiate these down to a minimum, where possible, on your behalf.
- Costs of establishing new loans need to be considered.
- The lending market is reacting to the economic impacts of the coronavirus crisis. Lenders are acting prudently and responsibly in extending finance. The impacts on a business from the COVID-19 pandemic are being considered with new finance applications. Such processes would be expected to be adhered to in regard to refinancing.
- Lenders would be open to discussions with well-established businesses with complete documentation and strong financial strategies and ways forward.
Due to the current lending environment, our role as an experienced finance broker has become even more significant to our customers. Navigating your own way through these unprecedented conditions may be a ‘challenge too far’.
Your Jade Finance consultant has the expertise, industry contacts and negotiating skills to best represent your interest to lenders and source you the best refinancing options.
To discuss your refinancing requirements, contact us on 1300 000 008 to speak with a Jade Finance consultant.
DISCLAIMER:THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.
