Refinancing

Whysohard

Hello! 

I wonder if someone can help, myself and my partner are both self employed, both running limited companies and both doing well up until recently. 

My business is badly effected by the cost of living issue we currently face in the UK. 

Over the past few years I have used debt as a way of financing growth for the business, either by borrowing through the company or borrowing personally and investing into the company. 

Over the past 6 months business has slowed down due to multiple reasons. Some personal others just general economic issues. Leaving myself with monthly debt repayments to make which are progressively becoming more of a strain. 

my current monthly debt payments I have to meet personally are 2.6k monthly.
Im in the final 12 months of all personal debt which was in excess of 150k and due to an increasing Economic issue looming and also due to other costs rising across the board with my business and personal life I would like to attempt to spread the remaining loan amount across another 5 years bringing the monthly costs down by a fair amount. 

Is this something that is even possible? When I attempt to do this online I don’t get approved, would it be better for me to contact the bank I hold the loan with directly? I find it strange they say no when from an affordability point of view I would be miles better off. 

Is this even a possible solution? 

for transparency my business is currently still profitable. I’m just trying to get information of any potential issues.

thanks in advance 

EssexHebridean

I suspect because of this being a largely business related query this forum isn't really the right place to be giving you advice. If the issue were with purely personal debt, then the advice is almost always to not consolidate - as invariably it leads to higher debt down the line. Because your situation involves a profitable business as well though the situation is almost certainly not as clear-cut. 

I'd suggest contacting https://www.businessdebtline.org/ for advice. 

I would guess that the affordability issue is because you are already making high repayments - and the lender doesn't know with certainty that you are going to use their loan to pay off your existing ones - thus they see a situation where you are adding (hypothetical numbers) a further £1000 a month payment for the new loan to the £2.6k you're already paying - and the sums simply don't add up. If you have made several applications and been turned down then this will also have affected the way lenders perceive you. 

sourcrates

I would agree with the above, we deal with personal debt on this forum, business debt is far too complex an issue, with far too many variables to consider.

I would also recommend you speak to business debt line about your next move here.