Written and reviewed by Corey Marino Founder & Finance Broker, FBAA member M-354085 · Diploma-qualified finance broker
Last reviewed 4 September 2026 · About Corey
Answer first
The short answer
Put payouts, switching costs, security changes and the new repayment schedule into one comparison before replacing an existing facility.
A business refinance should solve a defined problem after payouts, fees, term changes and security are considered. Combining several repayments into one can simplify administration, but it does not automatically lower total cost or improve the business's position.
Build a current liability schedule
List every facility being reviewed with its current payout, limit, utilised balance, rate, repayment, remaining term, security and early-payout cost. Use current statements and payout letters rather than accounting balances, which may not include accrued interest or closure charges.
Separate facilities that should remain in place. A useful trade line, equipment loan or low-cost overdraft should not be refinanced merely to make the table shorter.
Define the actual objective
Common objectives include lowering total borrowing cost, reducing the near-term repayment, releasing security, replacing a facility that no longer fits, adding working capital or aligning several maturities. Rank the objectives because one structure may not maximise all of them.
For example, extending the term can improve monthly cash flow while increasing total interest. Releasing property security may be worth a higher rate to one business and unnecessary to another.
Compare on a from-today basis
Create two columns: keep the current facilities and complete the proposed refinance. Include:
- payouts and discharge costs;
- new establishment, valuation and legal costs;
- ongoing fees;
- repayment frequency and amount;
- fixed or variable rate treatment;
- remaining and proposed terms;
- any balloon, residual or interest-only period;
- security and guarantees; and
- total repayments from the comparison date.
The Australian Government's business-loan cost guidance recommends understanding income, expenses, debts and cash flow and researching comparable products before negotiating or changing a facility.
Model the cash-flow effect
Insert both current and proposed repayments into a cash-flow forecast. Check the lowest cash balance, not just an average month. If the refinance includes extra working capital, show that amount and purpose separately so the new borrowing is not mistaken for a switching cost.
Review security before signing
Record every asset and guarantee supporting the current facilities, then map the proposed security. Confirm which registrations or mortgages will be released and which new ones will be taken. A lower repayment may not compensate for giving a lender broader security than the business intended.
Break-even and exit
Divide the upfront switching costs by the expected regular saving to estimate a simple break-even period, then test whether the business expects to keep the new facility beyond that point. Also ask what happens if the business repays early, sells a secured asset or requires another facility during the proposed term.
Documents to prepare
Provide current facility statements, payout letters, finance and security schedules, bank statements, recent BAS or accounts, the refinance objective and a forecast showing the resulting position. Where property or specialised assets are involved, valuations and ownership documents may also be required.
The business.gov.au application guide notes that documentation varies but may include financial reports, forecasts, leases and personal financial information.
How X Lend Finance compares a refinance
We reconcile the current debts and proposed use of funds, then compare suitable lender structures against the stated objective. The output should show the cash-flow change, security change, break-even period and estimated total cost. Approval, payout requirements and final terms remain subject to the selected lenders.