Low interest rates mean banks make less money on their loans, and are therefore less willing to fund risky ventures. That can be bad for you, the borrower.
But don't overlook the good side of this: "If you have good cash flow and the right assets to borrow money, now is a good time to refinance and lock in favorable rates for the next five to 10 years," points out John McQuaig, managing partner of McQuaig & Welk, the Wenatchee, Wash.-based management consulting firm.
Consider shifting your equity to more favorable collateral to lower your interest payments. For example, if your current loan is against equipment and you own a building, consider moving your equity to the latter if the bank allows it.
Be aware, though, that your building may not support as much lending as a few years ago. Prior to 2008, banks often provided financing of up to 80 percent of a building's value, points out McQuaig. Today, though, they may only provide 65 to 70 percent of the asset value. "That makes a big difference," he says.
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