Quick answer
A secured business loan refinance replaces one or more existing debts with a new loan backed by property. It is used when a facility is expiring, too expensive, in arrears or held by a lender that will not extend. The new loan repays the old debts at settlement, can release extra equity at the same time, and runs from $20,000 to $5,000,000 with no valuation needed before approval.
Key points
- Repays expiring, expensive or unwanted debts on settlement day
- Can consolidate several facilities into one secured loan
- Can release additional equity for working capital at the same time
- Useful when a bank or private lender will not extend
- Plan the next exit: a later bank refinance, a sale or trading cash flow
Why businesses refinance
A refinance swaps an existing debt for a new one on better terms or with a more willing lender. For business owners, the trigger is rarely about saving a fraction on pricing. More often it is one of these:
- A facility is expiring. A private loan, a construction facility or a bank loan reaches maturity and the lender will not roll it over.
- The current lender wants out. A bank reviews the relationship and asks the business to find another lender.
- Repayments are strangling cash flow. Several unsecured loans or merchant advances with daily or weekly deductions leave too little to run the business.
- Arrears have built up. Missed payments, default interest and lender pressure are making things worse.
- Equity is trapped. The property has grown in value and the business needs capital, but the existing lender will not increase the loan.
A property-secured refinance can address all of these in one transaction.
How a secured refinance works
- Gather the debts. List every facility to be repaid, with current balances and any arrears.
- Request payout figures. Each outgoing lender provides the exact amount required to close the loan on a given date.
- Assess the security. The new lender reviews the property, existing title and combined debt. No valuation is needed before approval.
- Agree terms. Interest can be prepaid or added to the loan, removing monthly repayments during the term.
- Settle. On settlement day the new loan repays each outgoing lender directly, old securities are discharged and the new mortgage or caveat is registered.
- Plan the next step. Keep accounts and tax lodgements current so the next refinance, to a bank or lower-cost lender, is straightforward.
Settlement usually runs electronically through PEXA, which coordinates the discharge and new registration on the same day.
Refinancing to buy time
Many refinances are not the end state but a pause button. A business may be one set of financial statements away from qualifying for a bank loan, or six months from selling a property. A private refinance clears the immediate pressure and gives the business the time it needs. When the bank refinance or sale arrives, it repays the loan and the security is discharged. Our guide to preparing a bank refinance while on a private loan shows how to use that window well.
Consolidating short-term unsecured debt
Unsecured business lending has grown quickly, and many businesses now carry two or three facilities at once, each with its own daily or weekly repayment. Individually they seem manageable; together they can absorb most of a business’s free cash. Consolidating them into one property-secured loan with interest prepaid or capitalised can transform cash flow overnight. See secured debt consolidation for the detail.
| Before | After a secured consolidation |
|---|---|
| Several lenders with daily or weekly deductions | One lender, one facility |
| Repayments taken from every sale | No repayments during the term if interest is prepaid or capitalised |
| Pressure to stack new facilities | Breathing room to rebuild margins |
| Unsecured pricing on each facility | Pricing reflects property security |
Ask whether a refinance would free up your cash flow with a short enquiry.
Refinancing an expiring private loan
Private loans are designed to be repaid, and sometimes the exit does not arrive in time. If your current private lender will not extend, a refinance into a new private loan can give the extra months needed, provided the property still has the equity and the exit is still credible. See expiring private loans for how to approach it before the maturity date.
What lenders look at on a refinance
| Question | What helps |
|---|---|
| How much is owed in total? | Up-to-date payout figures from every outgoing lender |
| Is there enough equity? | Recent comparable sales and accurate property details |
| Why is the refinance needed? | A plain explanation, including any arrears or disputes |
| What is the next exit? | Evidence of a sale, bank pathway or improving trading |
| Are there tax debts? | Full disclosure; they can often be cleared in the same refinance |
An illustrative refinance
Illustrative only. A transport company has a private loan secured over its yard that matures in three weeks, and the lender has said it will not extend. The company also carries two unsecured facilities with daily deductions. A new first mortgage over the yard repays the maturing loan and both unsecured facilities at settlement, with interest capitalised for twelve months. Freed from daily repayments, the company rebuilds its cash reserves, and the following year its bank refinances the yard on standard terms, repaying the loan in full.
Mistakes that make refinancing harder
- waiting until after the maturity date, when default interest and enforcement may already apply
- underestimating payout figures by forgetting fees, break costs or default interest
- refinancing without a plan for the next exit
- leaving tax lodgements outstanding, which makes the eventual bank refinance harder
Refinance or restructure?
A refinance replaces lenders; it does not fix a business that loses money every month. If the numbers show the business cannot cover its running costs, speak to your accountant or a registered insolvency practitioner about restructuring options alongside any refinance. ASIC publishes plain-English information for directors on those options. Where the business is fundamentally sound and the problem is the shape of its debt, a secured refinance can be the cleanest fix available.
Refinance with a plan
The best refinance solves today’s problem and sets up tomorrow’s exit. List the debts, the property and the outcome you want, and we will tell you whether a secured refinance makes sense. You can enquire with no credit check, your details stay with our team alone, and a specialist reads each enquiry before calling. Accurate balances and payout dates help us move quickly. Discuss a refinance.
Frequently asked questions
Why would I refinance a business loan into a private secured loan?
Usually because a facility is expiring and the current lender will not roll it over, because short-term unsecured debts are draining cash flow, or because the business needs time to qualify for a bank refinance.
Can I refinance a loan that is in arrears?
Often, yes. Arrears are considered case by case. The new loan pays the arrears and the balance to the old lender at settlement.
How does the old lender get repaid?
The old lender provides a payout figure. On settlement day the new lender pays it directly, the old security is discharged and the new security is registered.
Can I consolidate unsecured business debts at the same time?
Yes. Merchant cash advances, unsecured term loans and supplier debts can be repaid from the new loan, replacing several daily or weekly repayments with one secured facility.
How long does a refinance take?
It depends mostly on how quickly the outgoing lender provides a payout figure and attends settlement. Simple refinances can move within days once documents are signed.
Prefer to start now? Enquire here
About 60 seconds. No credit check when you first enquire, and a secured lending specialist calls you back.