Can you cut your interest payments?

If you have a business loan, a commercial mortgage, or a permanent overdraft facility with your bank, the chances are you are paying more than you need to in interest.

Interest payments can be a significant cost, so any way you can reduce them will help to improve your profitability. Given the right circumstances, almost any kind of loan can be renegotiated, and it is surprising how easy it can be to lower your interest bill in this way.

Track record

To be in a position to negotiate, however, you will need to have an established track record - which generally means to have been trading for at least three years with a good profit history, a clean credit record, and a healthy prognosis for the future.

It also helps if yours is a 'conventional' business type with which the prospective lender is already familiar. Also, the more capital and security you can provide, the better the terms you will be able to negotiate.

Leverage

If you want to renegotiate a loan, you basically have two options:

• Prepare a proposal for a new loan and take it to an alternative lending source
• Use this option as leverage to negotiate a better deal with your present lending source

Whichever route you take, you will need to prepare your case and support it with reliable documentation. We would be happy to assist with this, and with the eventual negotiations.