Title: Refinancing a Small-Business Loan: 7 Smart Tips - NerdWallet
Headings: Refinancing a Small-Business Loan: 7 Smart Tips
Refinancing a Small-Business Loan: 7 Smart Tips
1. Do the math
2. Ask the right questions
3. Be picky about your lender
4. Watch out for penalties
5. Keep an eye on your lender
6. Be a smart borrower
Don’t overborrow
Avoid MCAs
Don’t try to mislead a lender
7. Make an SBA loan part of your refi plan
If business loan refinancing makes sense for you, check out NerdWallet's small-business loan comparison tool.
Dive even deeper in Small Business
Small-Business Loans 2021: Compare Financing and Apply

Content: One example is a merchant cash advance, which a borrower typically pays back based on what’s called a buy rate. So with a merchant cash advance of $100,000 and a 1.2 buy rate, you multiply the advance by the rate, which means the total amount you must pay back is $120,000 over an agreed-upon period. With some lenders, a borrower must repay that total amount even if they’re able to pay off the debt ahead of schedule. In some situations, it may make sense to just stick with the loan, Graziano says. But if that debt obligation is already causing serious harm to the small business, it makes more sense to refinance, even it means taking a hit by prepaying. “If those contracts are sucking out too much cash from the business, then you’re better off taking the pain now,” Graziano says. 5. Keep an eye on your lender
When paying off an existing loan, stay on top of that process, Dealstruck co-founder and CEO Senturia tells NerdWallet. “You should be asking for a payoff letter and wiring instructions,” he says. He warns: