Businesses may realise benefits with the refinance commercial loans process where rates, circumstances, credit profile, and turnover have changed over the term. Changes to turnover with new contracts and an improvement to the credit rating may result in more workable terms and loan conditions with refinancing. Changes to business finance interest rates may deliver a lower rate on existing loans with a new loan.

While benefits may be realised through refinancing, there are costs to considered. Whether it is a good move for the business, will involve considering whether or not the benefits outweigh the costs. The timing of the refinancing decision may need to be considered in relation to the interest rate cycle and any opportunities which may present for the business.

If considering refinancing to place your business in a better position coming into 2026, we outline some of the major issues to bear in mind, and how we may assist you achieve your preferred financing solution.

Why consider refinancing commercial loans?

Refinancing credit commitments is not a process that all businesses will need to consider. Once many finance arrangements are secured, they may suit the business through the full loan term. But there are circumstances where refinancing can be required and can deliver benefits to the operation.

Achieving a better interest rate is a popular reason that a business may consider refinancing. It may be possible to achieve a lower rate where lenders have cut their rates in line with Reserve Bank decisions.

Reconfiguring the term can be another reason. This is often considered to achieve a different monthly repayment figure. A new loan may be structured with a longer term to deliver a lower repayment which better aligns with current cash flow. A shorter term may be negotiated for a large monthly outgoing that would allow the loan to be finalised earlier. These objectives may also be achieved with restructuring the balloon.

Improved business circumstances can present an ideal scenario for refinancing. Where conditions have improved with credit history, turnover or profit since the loan was originally sourced, a better solution may now be possible.

Refinancing existing commitments may be considered to allow the business greater capacity to take on additional credit for other asset investments. It may be part of an overall business finance restructuring, or the business owner may just not be totally pleased with the current lender.

What credit may be considered to refinance commercial loans?

All types of business loan products may be refinanced, with varying costs involved with the process.  Overdrafts may be refinanced with a different lender. While most businesses will arrange these facilities through their bank, we have access to non-bank lenders that may provide a more workable Overdraft proposition.

Secured and Unsecured Business Loans which have been used for non-asset purposes may be restructured.

Costs of importing or sourcing supplies and materials locally may have increased which requires a restructure of Trade Loan and Lines of Credit. This may be due to inflation, rises in supplier prices and shipping costs as is being seen globally. The limit on these loans may require a change which possibly the current lender is not prepared to affect. With our access to a large lender base, we may have a solution with one of our lenders.

Refinancing asset acquisition credit facilities – Lease, Chattel Mortgage, CHP and Rent-to-Own, may involve the term, rate, and possibly the removal of any stringent terms attached to the loan which are restrictive for the business.

Prospects with Refinance Commercial Loans

The prospects for a better outcome through refinancing will depend on the objectives and the individual business. The prospects of achieving lower interest rates in the near future are unclear. The RBA held rates steady again in November due to an unexpected jump in inflation. The data available over coming months will determine whether or not a February rate cut is possible. Businesses can stay across data announcements from the ABS in assessing their prospects for new year refinancing.

Minimising Costs to Refinance Commercial Loans

The objectives may be clear, the way to achieving those objectives may be clear, but the reality that may intervene is the costs incurred when refinancing. Costs need to be considered. These include paying out the existing loan which will vary depending on the credit facility, the stage of the term, and the lender. Lender fees and charges will also apply to establishing the new loan.

Using our expert services, businesses can have a vast lender market covered and their most suitable options presented for their consideration. We secure the most competitive rates on all commercial credit facilities and negotiate the most suitable terms and conditions on behalf of our clients. Targeting minimising the costs and maximising the benefits of refinancing all types of business loans.

For expert advice and assistance to refinance commercial loans, connect with  Business.Finance 1300 000 033.    

DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS