How does refinancing a business loan work?

Refinancing is essentially paying off existing debt with a new loan. There are a few reasons you might want to refinance an existing loan, including:

• You want to pay less on your loan repayments
• Your original business loan is no longer appropriate for your current business situation
• You want to renovate the commercial property or equipment for which you took a loan
• The fixed rate term on your original loan has ended
• You’d like to consolidate several loans you made into a single loan

There are additional costs that come with refinancing, such as: loan application fees, borrowing costs, break costs, exit/discharge fees, valuation fees and settlement fees. These can be expensive so you will have to carefully consider if the cost of refinancing is worthwhile for you. Our lending experts can help you determine whether it’s the right move.