Refinance away from your overdraft!

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Nick Moules
13th September 2012

Your bank likes business credit cards and overdrafts and they love it when businesses use them. They’re high margin products and many organisations appreciate the ease at which cash can be accessed, and with many pushed for the time to properly evaluate the costs of this lending, it’s silently draining the resources of SMEs across the UK.

But what can be done about it? Companies need cash to operate; there are bills to pay, staff to hire and without it many would shut down.

Refinancing through crowdfunding could be the answer. Whereas traditional refinancing through a bank loan can be seen as a laborious exercise with forms to fill out and hoops to jump through (typically it takes a bank 3-5 weeks to review and advance an application for funding), and ultimately the decision maker will ask whether they really want to move you off high margin products like overdrafts. Would you in their position?

Crowdfunding attracts investors willing to lend money at rates typically between 6 and 12 per cent dependent on the risk profile of the borrower. So if you have a credit card or overdraft that charges more than that and you’ve got a clear idea of how much capital you’re going to need over the next couple of years, why not halve the interest you pay on your borrowing with a loan and free up cash to grow your business rather than watch it disappear down a black hole every month.

Plus, banks will charge a percentage fee for keeping a line of credit open even if you’re not using it, so why pay for an overdraft that you don’t need all the time if you know you can raise funds through crowdfunding in just a few days or even hours?

Applications with rebuildingsociety.com are free and straight forward and within a few days you could be attracting money that can pay off your existing debts and minimise your future repayments.

We were created by people who truly understand the frustrations of financing SMEs and have created a service to make the money side simple, giving you the chance to focus your energies on what you do best.

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