From our office at Chester West Employment Park, we speak to owners of all kinds of local businesses - from independent shops, cafes and restaurants in the city centre, to engineering, construction and logistics firms.

A good deal of the borrowing these businesses carry was arranged in a different interest rate climate.

Bank Rate was higher through 2023 and 2024, and some owners took whatever finance they could get at the time, often in a hurry.

Bank of England figures show Bank Rate has stood at 3.75% since 18 December 2025, but that does not mean every business loan has become cheaper.

Fixed rate agreements stay at the rate you signed up to, and short-term products that take repayments daily or weekly do not change at all. It does mean now is a sensible time to check.

Why existing debt deserves a review

Most owners know what they pay each month. Fewer could say, off the top of their head, what interest rate they are paying, when each agreement ends, what it would cost to settle early or which personal guarantees they have signed.

Those details decide how much room the business has to manoeuvre.

A review often turns up one of these situations:

• A merchant cash advance or other short-term facility that takes a slice of daily card takings, which helped in a tight spot but now weighs on cash flow
• Several small agreements taken out over the years, each with its own repayment date
• A loan that is nearly paid off, where the business could use extra capital for a refit, new equipment or more staff
• A facility coming up for renewal, where the existing lender's terms have changed

In each case, it may be possible to replace what you have with a better structured facility.

When you are refinancing a business loan, the new lender pays off the old one on completion and the business carries on repaying the new agreement instead.

When switching makes sense, and when it does not

Refinancing is not automatically the right answer. Before doing anything, ask your current lender for a settlement figure.

Some agreements can be repaid early with no penalty. Others charge a fee or a share of the future interest, and on a loan with only a short time left to run, that charge can wipe out any saving.

Look at the total amount repayable, not just the monthly payment. Spreading a debt over a longer term will usually lower each instalment but can mean paying more overall.

Also check whether a new lender would want a fresh personal guarantee, because a slightly cheaper loan with more personal exposure is not always a better deal.

Be honest about why you are looking. If trading has dipped and the repayments are genuinely unaffordable, a longer loan may only postpone the problem.

In that case, speak to your accountant early, because there are usually more options before arrears build up than after.

One size does not fit Chester

Businesses in and around Chester range from visitor-facing shops, cafes and hotels to firms serving trade customers across the North West and North Wales.

Those businesses have very different cash flow patterns. A hospitality business may have a very different spread of busy and quiet months from a contractor waiting on stage payments, and the repayment structure should reflect that.

A facility that suits one business can be a poor fit for the one next door, even if the amount borrowed is the same.

What to put together for a review:

• A copy of each finance agreement, showing the rate, the term and any security
• A settlement figure for each one from the current lender
• A list of the personal guarantees you and any fellow directors have given
• A simple calendar of when each repayment leaves the account, so you can see where the pressure points fall
• A short note of anything you want new funding for, so the review looks forward as well as back

With that in front of you, it quickly becomes clear whether the business is paying more than it needs to, whether the repayments line up with the way money actually comes in, and whether a different structure would help.

Sometimes the right outcome is to change nothing, and that is worth knowing too.

As a whole-of-market broker, we search the market and approach suitable lenders on a client's behalf, and we compare any switch against simply staying put.

More information about business loans in Chester is on our website.

About the author

Simon Palmer is director of Smart Funding Solutions, a whole-of-market commercial finance broker based at Chester West Employment Park that arranges business finance for firms across Cheshire and the UK.

Smart Funding Solutions is a trading style of Smart Funding Solutions Limited (FRN: 972740), who are Appointed Representatives of White Rose Finance Group Ltd (FRN: 630772), directly authorised by the Financial Conduct Authority