Debt is a reality for virtually all businesses. Very few startups are able to benefit from venture capital – around 0.07%. The vast majority of business owners must borrow capital from conventional lenders and other funding solutions. To supply this massive demand, a wide range of financing programs and sources has sprung up, making it easier to find capital in the first place. However, that debt can be an asset in additional ways that go beyond merely supplying the funding necessary to open your doors in the first place. For instance, debt refinancing can provide powerful benefits.
You Maintain Control
One of the most critical benefits of debt refinancing as opposed to seeking outside investors or VC capital is that you maintain complete control over your business. Investors only provide capital in exchange for a share of ownership, which means they have a say in how you operate your business.
You Make Decisions
Debt refinancing ensures that you (or your management team) can still make the day-to-day decisions necessary for running the company. With other funding options, you lose agility because it’s no longer possible to make decisions on your own.
Less Tax Liability
Debt refinancing results in reduced tax liability because the interest payments are tax deductible. Other charges from conventional lenders can also be deducted from your taxes.
Debt refinancing allows you to attain a lower interest rate for your commercial debt, but the tax-deductible nature of the interest means that you are actually paying even less over time.
Boosts Business Credit
Establishing and maintaining business credit is crucial, and debt refinancing can help make you a more appealing risk to other lenders both immediately and in the future by reducing your debt load while establishing a credit history.
These are just a few of the benefits offered when you refinance your commercial debt. Contact Safe Harbor Commercial Capital to learn more.