In the past when I have tackled this topic, we were expecting significant interest rate increases. However, most recently we have seen interest rates decline. That still begs the question – as a business owner, what should you do? There are several things you can do as a business owner to take advantage of historically low rates.
- Refinance – If you have any long term debt that carries a high interest rate, you should consider refinancing this debt. Be sure to review your documentation for exit or penalty fees. Also, keep in mind, even if you have fees, it is still worth considering a refinance since you may be able to save more than the expense of the fees in the long run if you obtain a significantly lower interest rate.
- Review your capital expense budget – If you’ve been holding off on any significant capital expenditures or expanding, it is a good time to lock in a low long term interest rate. Banks are aggressively seeking equipment and expansion opportunities.
- Perform a financial check-up – Review your financials to ensure that you are presenting your company in the best possible light. To take advantage of this environment your banker is going to want to review your current financial condition (operations, cash flow, leverage, and projections.) Being prepared is the quickest path to approval so you can take advantage of the current low rates.
If the economy continues to improve, we can expect interest rates to rise so acting now could be in your best interest. Your local banker is prepared to assist you in determining the best option for your company. Contact a Univest Relationship Manager at 877-723-5571 for assistance.
Univest Bank and Trust Co. is Member FDIC, Preferred SBA and Equal Opportunity Lender.