Commercial Finance
Refinancing your Business
Commercial Loan Restructures and Refinancing
When considering commercial refinancing, it’s important to carefully evaluate several factors, just as you would with any commercial loan. At 3 Pillars Finance, we take the time to understand your business’s unique requirements and objectives, discussing how refinancing can help you achieve your goals.
Common Reasons to Refinance a Loan
- Lower Rates – Refinancing can offer lower interest rates than your current loan. This can significantly reduce your repayments, especially if you extend your loan term.
- Debt Consolidation – Combining multiple business loans into a single loan can simplify debt management and repayment processes.
- Increased Cash Flow – Lower debt servicing costs mean more cash available for other business needs, such as funding new products, hiring more staff, or increasing inventory. This can positively influence the growth of your business over time.
- Release of Securities – If previous loans were secured by property, a restructure may free up one or more properties from being used as security.
- End of Fixed Rate Period – As you approach the end of your fixed rate period, refinancing can help you explore new rates and structures that might better suit your financial needs.
Potential Costs of Refinancing a Business Loan
Refinancing can involve various fees depending on your lender and circumstances, such as:
- Early Exit Fees – Some lenders and loans may incorporate a payout charge or fee for early prepayment.
- Fixed Rate Break Costs – Exiting a fixed rate loan before the end of the term usually incurs a fee, which can be substantial.
- Origination Fees – Lenders typically charge an origination or establishment fee when setting up a new loan.
- Valuation Fees – If refinancing requires providing an asset as security, a valuation might be needed, often for commercial property. While some lenders may waive this fee, others will charge for it.
At 3 Pillars Finance we recommend all business lending is reviewed annually or as your financial position or that of the business changes.
Frequently Asked Questions
A commercial loan is an agreement between your company and a financial institution to finance goods, plant, machinery, vehicles, new or existing business purchases, or any other commercial purposes.
3 Pillars Finance offers a range of loan products for various business needs, including:
- Business acquisitions and start-ups
- Business refinancing
- Retail and business fit-outs
- Development finance
- Construction finance
- Leasing products
- Equipment and vehicle financing
- Working capital solutions and cashflow funding
- Lines of credit
- Debtor finance
- Rural property finance
- Tax debt finance
Yes, 3 Pillars Finance has specific expertise in franchisee funding. We assist with the acquisition of new franchises, refinancing existing franchises, fit-outs, and capital growth needs.
The required security depends on your personal situation and the lender’s criteria. Some business loans may require collateral such as commercial or residential property. For loans involving goods with identifiable markers (like serial numbers), these items themselves may be sufficient as collateral. A 3 Pillars Finance broker can help you navigate your options to find the right loan for your needs.
Having a past bankruptcy or poor credit history does not automatically disqualify you from obtaining a business loan. There are various options available for borrowers with a bad credit history, especially if they have strong business cashflows or assets to secure the loan. Different lenders have different policies regarding credit, so you may be pleasantly surprised by your options.
At 3 Pillars Finance, we collaborate with lenders to find the most suitable financing solutions for your business needs. We often strive to secure an indicative offer from the lender before proceeding with the formal application process and obtaining credit checks. This approach helps reduce the risk of unwanted rejections and negative impacts on your credit score.
We are just a phone call or online inquiry away. We enjoy discussing options with you and are ready to answer any questions you have. Feel free to contact us and start the conversation.
