Is it Time to Refinance Business Debt? Here's What to Know

When you lead and manage a healthcare practice, it is quite easy to have debt add up—quickly. Debt could be associated with having taken out a practice startup loan, you might have needed to purchase costly equipment or go through an office upgrade. No matter the reason for your debt, refinancing your debt could offer a great solution.

In order to ensure a strong financial foundation for your healthcare practice, learn how refinancing debt could be a key strategy. The team at LenDRgroup consulting is happy to provide some key information.

What Does Refinancing Mean?

Ultimately, this is when a healthcare practice will take out a new loan with the goal of paying off existing debt. Refinancing typically will allow you to get a lower interest rate, pay off a loan sooner, spend less money on interest payments, and potentially extend the term of the loan. It is a great way to expand your practice’s operations and improve cash flow.

When Should You Refinance?

There are a variety of reasons why you might consider refinancing your practice’s debt, including:

• Financial Problems: If you are not able to meet your existing debt obligations, refinancing may help take some stress off.
  
  
• Favorable Market Conditions: Your practice might decide to refinance debt because of an improved credit rating or in an effort to decrease interest rates.

Why Your Practice Should Refinance

Here is when it makes the most sense to refinance:

• You Want to Get Rid of High-Interest Rates: Maybe you have a high-interest loan tied to an initial operating loan or a mortgage. Refinancing allows you to lower your interest rate, which can deliver savings.
  
  
• You Want to Improve Your Credit Score: Refinancing can elevate your credit utilization ratio and improve your payment history.
  
  
• You Need Improved Cash Flow: If your practice’s business has slowed down or hit a rough patch, refinancing debt can help you get access to extra funding that will allow you to keep operating.
  
  
• You Want More Favorable Payment Terms: Refinancing debt enables your practice to start with a brand-new payment schedule and term, which will help you pay the debt in a way that benefits your practice.
  
  

Learn if Refinancing Debt is Right for You

If you are interested in learning if refinancing debt is right for your business, we encourage you to reach out and set up a consultation with the LenDRgroup Consulting team. We would love to learn about your individual situation as a healthcare practice owner and advise you on the next steps. We have created a variety of personalized financial strategies for medical, dental, and veterinarian practice owners and would love to do the same for you.

Reach out to our team today and let's talk!