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Replacing a single loan? See the cost of refinancing a business loan. This guide focuses on combining several debts.
On a small screen, scroll the table sideways to see every column.
| Compare before and after | Include |
|---|---|
| Amount owed | Current payout figures rather than statement balances alone. |
| Payment burden | All debit dates, instalments and any final balloons. |
| Total remaining cost | Interest, exit charges and new setup or service fees. |
| Security | Assets and guarantees under both arrangements. |
| Access to old credit | Whether facilities will close or remain available to draw again. |
Build a complete debt list
Include business loans, cards, overdrafts, equipment finance, tax debts and any other obligations relevant to the restructure. Record the creditor, payout amount, rate or charge structure, repayment dates, remaining term and security.
Request current payout figures. Some agreements include charges or future obligations which are not obvious from a balance shown on a dashboard.
Not every debt needs to go into the new loan
A low-cost facility close to being repaid may be worth leaving alone. So may equipment finance with suitable security and an affordable schedule. Compare a partial consolidation with replacing every account; simplicity is a benefit, but it should have a price you can see.
Separate fixed debts from facilities that support day-to-day trading. Closing an overdraft may reduce the number of creditors while removing the buffer used for payroll. Retaining it creates a different risk if the business can build the balance again. Decide the role and limit of each continuing facility deliberately.
For tax debts, compare an available ATO arrangement separately from commercial refinancing. For supplier arrears, consider whether a negotiated schedule would preserve supply without adding a lender. Record the terms offered rather than assuming every creditor will agree to wait.
Show the lender what changes after the restructure
The proposal needs a repayment case for the combined debt, supported by current trading and a complete debt schedule. Explain why multiple debts built up and which cause has ended or will change. A lower payment only helps sustainably if the business can also meet its new obligations as they arise.
Use evidence for the recovery assumptions: a completed one-off expense, a signed replacement contract, a price increase already implemented or costs actually removed. Keep hoped-for improvements separate. If the forecast depends on several uncertain changes happening together, test the result when one is delayed.
Separate cash relief from a cost saving
For an illustration excluding other fees, existing debts with $72,000 of remaining payments may be replaced by an offer requiring $1,500 a month for 60 months. The new total is $90,000. Monthly pressure may fall, but the business pays $18,000 more overall.
That trade-off may still deserve consideration if it creates a workable recovery plan. It should be described honestly as payment relief at a higher total cost, not automatically as saving money.
Check what changes beyond the payment
A new property-secured loan can put an asset at risk that did not secure the old debts. Guarantees may become broader. Conversely, paying out a facility does not ensure its registered security has been released; include discharge steps in settlement.
Ask which debts the lender will pay directly, what evidence of closure is required and whether an old revolving facility remains open. Drawing again from cleared limits can quickly undo the intended reduction.
Compare the first year and the final balance
List payments month by month under both arrangements. Some existing loans may finish during the year, so today's combined repayment is not necessarily the amount that would continue indefinitely. Comparing it with a new five-year instalment can exaggerate the relief.
Suppose an illustrative $800 monthly repayment ends in three months while another $1,200 repayment continues. Keeping the loans means payments fall from $2,000 to $1,200 after month three. A replacement at $1,500 reduces immediate pressure but would cost more each month from month four, before considering fees or the final debt balance.
Request dated payout letters and a settlement statement showing each creditor, deductions and any money released to the business. Check the evidence that old accounts have been settled and required security released. Keep these records in case an old debit or charge appears later.
Pause if the new facility only buys another short interval
Repeated top-ups, unpaid tax and overdue suppliers can indicate a wider problem than an inconvenient payment schedule. ASIC advises businesses in financial difficulty to act early and points to professional and financial counselling support (checked 5 October 2026).
Get advice before offering additional personal security to clear old facilities when the business still cannot meet ordinary costs. The right outcome may involve negotiations or a smaller operation, rather than finding a lender willing to combine the balances.
Decide what must change after settlement
If a one-off disruption has ended, a manageable repayment may give the business time to recover. If margins remain weak or tax is still being left unfunded, a new facility leaves the original problem in place.
Write down how the released cash will be used. In an illustrative restructure that reduces monthly debt payments by $1,000, the forecast should show whether that money funds new tax obligations, rebuilds a reserve or covers continuing losses. Those are different outcomes, even though the bank balance initially improves by the same amount.
Agree what happens to paid-out cards and revolving limits. Drawing again can recreate the old debt beside the new loan. Where payments are already unmanageable, speak to existing creditors and a financial counsellor or qualified adviser before taking on a replacement facility.