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How Refinancing Business Loans Works – And Why It’s Smart
Updated: July 28, 2025, 07:57 Published: January 13, 2025, 09:56
For businesses grappling with multiple loans and credits, refinancing can be a strategic solution to improve liquidity and reduce monthly costs. Refinancing, which involves replacing one or more existing loans with a new loan on better terms, has become an attractive option for many entrepreneurs looking to create a more stable financial foundation.
Refinancing can give companies the opportunity to take advantage of lower interest rates, especially if market rates have fallen or the company’s creditworthiness has improved. In addition, refinancing can help companies consolidate multiple loans into one, leading to reduced monthly costs and easier debt management.
“Extending the repayment period through refinancing can also free up capital that can be used for investments, expansion, recruitment, or to cover unforeseen expenses. This is especially important for companies striving to strengthen their liquidity and be better equipped for future business opportunities,” says Magnus Ersson, COO at Toborrow.
Three Major Benefits of Refinancing
1. Lower Costs
By replacing existing loans with a new loan at a lower interest rate, companies can reduce their monthly expenses and free up capital that can be reinvested in the business.
2. Simpler Administration
Consolidating multiple loans into one means that the entrepreneur avoids keeping track of multiple payments and lenders. The administrative burden is reduced, and the company can focus on developing its core business.
3. Strengthened Liquidity
Reduced monthly costs provide greater financial flexibility, which is crucial for meeting new business opportunities or managing challenging periods.
Refinancing is an effective strategy for reducing costs and creating a more stable financial foundation for long-term growth.
About Toborrow
Toborrow is a digital loan broker that helps companies find favorable financing solutions. We offer business loans up to 20 million SEK and compete with several different lenders so that you can find the best loan terms. Our goal is to make it easy and safe for you to finance your business.
The article is produced by Brand Studio in collaboration with Toborrow.
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