Did you know refinancing your business loan could save you thousands each year?
Running a business is never simple. Every decision you make, right from hiring staff to buying new equipment can have consequences and affect your bottom line.
With so many decisions swirling around in your head, it’s easy to overlook things. One such key area is your existing business loans. And honestly, that’s completely understandable. When you have a million things competing for your attention, it’s hard to worry about a loan that’s been quietly ticking along for the last few years. After all, the repayments are automated, money gets debited from your account every month or fortnight depending on your loan contract, and everything seems “fine”.
But “fine” is not always good enough.
I remember talking to one of my client’s Sarah, who runs a small FMCG manufacturing business. She had taken out a business loan four years ago when her cashflow was tight. Fast forward to today, business is booming and everything seems stable, so she didn’t think much about it. But when she ran the numbers with us, she realized that refinancing could save her $4,758 a year and give her the breathing room she needed to hire another team member. With this money she was able to hire an offshore content creator and increase her marketing initiatives. This refinanced loan not only saved her money but also gave her more time to do other things rather than write content herself.
I believe this ss the real power of refinancing. It’s not just about saving dollars on paper, it’s about freeing up resources to grow, innovate, and buy back your time.
Stories like Sarah’s are why I always tell business owners: refinancing isn’t just for struggling businesses; it can be a smart move for anyone.
What Does Refinancing a Business Loan Mean?
In the simplest terms, refinancing means replacing your current loan with a new one, usually with better terms. That could mean:
- Lower interest rates
- Adjusting the loan term to better suit your cashflow
- Switching to a structure that gives you more flexibility
- Accessing additional funds for growth
Think of it as upgrading your mobile phone plan, you’re not just changing for the sake of it, you’re making it fit your life (or business) better.
Signs It Might Be Time to Refinance
Not every loan needs refinancing, but here are some situations where it often makes sense:
Interest Rates Have Dropped
I recently worked with Tom, who runs a logistics company. His loan rate was locked in at 10.8% on an unsecured rate, and he didn’t think much of it. He entered into this loan last year when interest rates were high. However, since then interest rates have come down.
When we checked current rates, Tom qualified for secured refinance rate of 7.6% and that too with a big bank. That small change cut his repayments by hundreds each month, money he could now put toward new trucks or other business growth initiatives.
Your Business Has Grown or Improved Financially
If your revenue is up, your cashflow is strong, or your credit score has improved, lenders may offer you better terms. That’s exactly what happened with another one of my clients, Maria, she runs a café. She took a business loan to start her café and after a few years of steady growth, she was able to refinance and get a lower interest rate. This freed cash for Maria to start planning for business expansion and starting a new cafe. Sometimes, it’s not just about saving money, it’s about removing the financial stress that holds you back, so you can focus on growth opportunities instead.
Your Loan Structure No Longer Fits Your Needs
Sometimes a loan that worked when you first started your business doesn’t match your goals today. Maybe you want shorter repayment terms to save on interest, or longer terms to free up cash for operations. Refinancing gives you that flexibility.
Hidden Fees or Unfavourable Terms
Older loans can carry hidden fees or strict conditions. A fresh loan could offer clearer, fairer terms avoiding surprises down the track.
How Refinancing Can Save You Money
Refinancing isn’t just about switching lenders; it’s about optimizing your loan for your business.
- Lower Interest Rates: Even 1–2% can save thousands over the life of a loan depending on your loan amount. To put things int perspective a 2% interest rate differential can save you approximately 10k in a 250k loan.
- Reduced Monthly Payments: Extending the term can ease cashflow, giving you room to invest in growth.
- Access to Better Features: Flexible repayment options, redraw facilities, or offset accounts can make a real difference.
How a Commercial Broker Can Help
We get it, refinancing can feel overwhelming. There are countless lenders, products, and fine print clauses. That’s where a commercial broker comes in.
We can:
- Assess your current loan and financial situation
- Compare multiple lenders and products for the best fit
- Recommend refinancing options tailored to your business
- Handle the paperwork and applications, saving you time and stress
It’s like having a financial GPS, we help you navigate the twists and turns and get to the most cost-effective solution.
Final Thoughts
Refinancing isn’t just for businesses in trouble. It’s a strategic move that can save money, improve cashflow, and fuel growth.
Ask yourself: “Could I be doing better?”
Sarah, Tom, and Maria did and it made a big difference.
Let’s Chat
At Xpress Finance, we specialise in helping SMEs secure smarter financing solutions. Curious if refinancing could work for your business?
Let’s have a chat and we’ll walk you through your options and help you find the right fit.