What is Corporate Refinancing?
Corporate refinancing is the method of restructuring the existing debts of a company to reorganize its financial responsibilities. It is done by the companies for various reasons such as increasing maturity period, improving the credit score or improving the cash flow of the company. Companies take advantage of economic changes such as a decrease in the rate of interest on loans due to various factors, changes in the terms of the loans, introduction of schemes, etc. A company with asset-based financing may refinance to access additional funds or secure more favourable terms based on the value of its assets. The companies can make use of the additional funds to expand the business or to maintain the inventory of the business. When a company requires financing for expansion or working capital it tends to refinance its existing credit facilities to accommodate the funding needs. The reason for corporate refinancing can be a reduction in the company’s revenue, a threat to solvency, consequences of litigation, insufficient investments, etc.
Contact Us