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The refinancing markets are characterised by constant ups and downs that depend on the economic situation in the eurozone. Negative interest rates seemed unimaginable a few years ago, but the recent past has shown that they are a reality. The sharp rise following economic events also surprises many companies time and again.
A good time for refinancing is always when the demand for investments is correspondingly low. However, most companies are not doing well economically then either. Nevertheless, anti-cyclical action is advisable. It offers the opportunity to position oneself on the market, prepare for the future and emerge stronger from crises. To do this, it is important to analyse company processes, adapt strategies and revise ineffective processes.
One of the most important measures is the diversification of refinancing sources. In addition to conventional bank loans, companies should also consider alternative financing options such as crowdfunding, factoring or bond issues. The different maturities of the refinancing instruments also play a decisive role. Hedge management can be used to carry out a maturity transformation (e.g. from Euribor 1M to swap rate 1 year) or a transfer from variable to fixed interest cash flows.
With a skilful combination of different measures, tailored to the company’s activities, the refinancing risk and the associated costs can be significantly reduced and financial flexibility increased.
