Refinancing means replacing existing business borrowing with a new facility. Consolidation means combining more than one commitment. Either can change the monthly payment, term, security or total cost. Extra headroom may sometimes be included too, but every route is a new credit decision and any offer depends on assessment, approval and terms.
What are you actually trying to change?
Start with the problem in the current arrangement. A lower monthly payment, fewer separate payments and extra working capital are different objectives. They may lead to different facilities, and one new loan will not automatically achieve all three.
- Is one facility approaching renewal or becoming too expensive?
- Are several repayments making the monthly cash position difficult to manage?
- Does the business need additional headroom as well as replacement borrowing?
- Would a different repayment pattern fit the way the company gets paid?
- Is the pressure temporary, or does normal trading no longer cover normal commitments?
Two-minute funding check
Compare routes for the borrowing you already have
Tell us how much borrowing you want reviewed, what you want to change and when you need the new arrangement. We’ll compare the available routes and come back with a clear shortlist within 24 hours.
- One check, not applications to several lenders.
- A specialist compares the available funding routes.
- We come back with a clear shortlist within 24 hours.
Refinancing, consolidation or additional borrowing?
| Route | What changes | What to check |
|---|---|---|
| Refinance one facility | A new arrangement repays and replaces one existing commitment | Exit costs, new fees, term, security, monthly payment and total repayable |
| Consolidate several commitments | More than one balance is brought into one new facility | Whether every balance can be included and whether the overall cost improves |
| Add extra headroom | The new facility is larger than the borrowing it replaces | What the additional money funds and whether the larger repayment is affordable |
| Keep existing borrowing and add another route | The current facility remains while a separate product covers another need | Existing lender restrictions, combined repayments and duplicated security |
A lower monthly payment can still cost more
Extending the term may reduce the amount leaving the bank each month. That can help cash flow, but it can also mean paying interest for longer. Compare the full amount repayable, not only the monthly figure. Include arrangement fees, broker fees where applicable, legal costs, valuation costs and any early-repayment charge on the current facility.
Ask for the settlement figure and current agreement before comparing new options. Without those numbers, a cheaper-looking payment is not a reliable comparison.
When refinancing may not fix the underlying problem
Restructuring can help when the current facility no longer fits the business. It is less likely to solve a company that loses money through normal trading or repeatedly needs new borrowing to make existing repayments. If the company may be unable to pay debts as they fall due, use the current GOV.UK business debt and continuity guidance and obtain appropriate professional advice promptly.
What to prepare
- Current agreements, balances, settlement figures and repayment schedules.
- Any early-repayment, break or exit costs.
- Recent accounts, management figures and business bank statements.
- A current cash-flow forecast including every existing commitment.
- A clear explanation of any extra headroom and how it will be used.
- Details of security and guarantees already supporting the borrowing.
Frequently asked questions
Can a business refinance an existing loan?
Potentially. A new provider, or sometimes the current provider, may consider replacing the facility. The business still has to meet the relevant assessment and affordability requirements, and the current agreement may have exit costs.
Can refinancing include extra working capital?
Some arrangements may include additional borrowing, subject to assessment and terms. The extra amount, purpose and resulting repayment must all be considered rather than assuming refinancing automatically creates headroom.
Is consolidation always cheaper?
No. One payment may be easier to manage and the monthly amount may fall, but fees and a longer term can increase the total amount repaid. Compare the complete old and new costs before deciding.