Secured business loan · Refinancing business debt
Secured business loan for Refinancing business debt
Business debt refinancing is replacing an existing facility with a new one to lower the rate, extend the term, release equity or consolidate several debts into a single repayment.
How a secured business loan works for Refinancing business debt
Refinancing unsecured business debt onto a property-secured facility produces the largest cost reduction available in Australian business lending — often halving the rate and doubling the term. It also converts debt that could not touch your home into debt that can. That is a significant change in risk, and it should be a considered decision rather than a reflex reaction to a cash-flow squeeze. Where the business is fundamentally sound and the debt was expensive, it usually makes sense.
The cash-flow pattern we plan around
Existing commitments consuming more cash flow than the current trading position warrants, often because facilities were taken when the business was smaller or its credit position weaker.
What refinancing business debt typically fund
- Lowering the rate on existing business debt
- Extending the term to reduce weekly or monthly repayments
- Consolidating multiple facilities into one
- Releasing equity from owned equipment or property
Secured business loan for Refinancing business debt: the numbers
| Typical amounts | $50,000 – $5,000,000 |
|---|---|
| Term | 12–180 months |
| Indicative rates | 6.8% – 13.5% p.a. |
| Repayments | Monthly, principal and interest or interest-only for a set period |
| Speed | 2–6 weeks including valuation |
| Documents refinancing business debt usually need | Current loan contracts and payout figures for each facility · 6–12 months of bank statements and latest financials · Details and condition of any asset or property offered as security |
Rates are indicative, change without notice and depend on the lender, product, asset, term and your credit profile at the time of application. They are not an offer of finance. Comparison rates, where shown, are true only for the example given.
Key terms
Business debt refinance
A business debt refinance is a new facility that pays out one or more existing loans, changing the rate, term, structure or lender, and assessed on whether the total cost improves rather than the repayment alone.
Payout figure
A payout figure is the amount required to close an existing facility on a given date, including any remaining balance, break costs and fees, and it is frequently higher than the balance shown on a statement.
What is a secured business loan?
A secured business loan is business finance where a specific asset is pledged as security. The lender registers a mortgage or a security interest over that asset and can sell it to recover the debt if the loan is not repaid, which is why pricing is lower than unsecured lending.
What can be used as security for a business loan?
Residential property, commercial or industrial property, unencumbered equipment, and business assets under a general security agreement are all accepted on our panel. Property gives the widest lender choice and the lowest rates.
What LVR do secured business loans allow?
Loan-to-value ratios are commonly up to 80% against residential security and 65–75% against commercial property. Specialist and private lenders may go higher at a higher rate and for shorter terms.
Questions from refinancing business debt
When is refinancing business debt worth it?
When a lower rate, a longer term or consolidating several facilities reduces the total cost or the monthly repayment enough to outweigh exit fees and set-up costs. Facilities taken when the business was smaller or its credit weaker are the most common candidates. A broker runs the numbers including early payout costs before recommending a switch.
Can I refinance ATO debt into a business loan?
Yes. Some lenders refinance tax debt into a term loan secured against equipment or property, which protects a payment arrangement and frees cash flow, while others exclude ATO debt altogether. Lender choice matters and a broker knows which will accept it.
Can I refinance equipment loans to lower the repayment?
Yes. Equipment and vehicle loans can be refinanced onto a longer term, a lower rate or with a balloon added, and unencumbered assets can be used to raise cash through a sale and leaseback. Lenders assess the equipment’s value and age and the remaining term.
Can I release equity from my premises when refinancing?
Yes. Refinancing a commercial property loan at a higher value or lower loan-to-value ratio can release equity for working capital, expansion or debt consolidation, typically up to 70 to 80 per cent of the property’s value. Lyft Financial handles commercial property refinancing.