Is refinance or consolidation of existing agreements possible?
Short answer
Yes — refinancing or consolidating existing business finance agreements is often possible, but eligibility and benefits depend on the type of finance, the lender’s criteria, and your company’s financial position.
Refinance or consolidation can mean replacing multiple facilities with a single loan, restructuring terms, or moving debt to different lenders to reduce cost or simplify repayments.
What kinds of business agreements can be refinanced or consolidated?
Bank loans and overdrafts
Traditional term loans and overdrafts can often be repaid early and replaced with new facilities if the lender allows early settlement and the business qualifies.
Some lenders charge early repayment fees, so the net benefit depends on the new rate and any exit costs.
Asset finance, hire purchase and leasing
Asset finance can sometimes be restructured, refinanced or re-leased, particularly for funded assets with remaining value.
Options include refinancing remaining balances, replacing legacy contracts with new finance providers, or using equity released from the asset to reduce overall cost.
Invoice finance and merchant cash advances
Invoice finance (factoring or discounting) can be switched between providers to improve rates or service terms, subject to existing assignment arrangements.
Merchant cash advances and some alternative receivable-based facilities can be consolidated, but these often carry higher fees and require careful comparison.
Why businesses choose to refinance or consolidate
Simplify repayments and reduce administrative burden
Combining multiple agreements into one loan reduces the number of monthly payments and lender relationships to manage.
This can save time for finance teams and reduce the risk of missed payments.
Lower monthly repayments or interest cost
Refinancing to a lower interest rate or longer term can reduce monthly payments and improve short-term cash flow.
However, longer terms can increase total interest paid, so total cost must be modelled.
Release equity or free up security
Replacing secured facilities with alternative structures can free assets or remove restrictive covenants that limit business activity.
Refinance can also free up borrowing capacity for growth or working capital needs.
What are the limitations and risks?
Early repayment charges and exit costs
Many lenders include early settlement penalties, administration fees or breakage costs that reduce the financial benefit of refinancing.
Always quantify exit costs alongside expected savings before proceeding.
Credit, security and covenant implications
Refinancing may require new security or personal guarantees, and lenders will reassess creditworthiness.
Changing terms could trigger covenant tests or affect existing supplier or landlord agreements.
Longer-term cost vs short-term cashflow
Lower monthly payments achieved by extending terms may increase total interest paid over the life of the loan.
Balance short-term relief against long-term pricing to decide what’s right for your business.
Practical steps to assess and action refinance or consolidation
1. Gather key documents
Collect loan agreements, security documents, repayment schedules, recent management accounts and cash-flow forecasts.
These let potential providers model savings and assess suitability accurately.
2. Calculate true cost
Compare the total cost of staying in your current deals (including exit fees) against the cost of new finance.
Include legal costs, arrangement fees and any changes to covenants in your comparison.
3. Seek multiple options and view Decision in Principle
Not all lenders will touch certain facilities, so compare specialist lenders, mainstream banks and brokers.
Getting a Decision in Principle or eligibility check early helps you understand where you stand before committing time to formal applications.
How Best Business Loans helps, compliance and next steps
How we support your refinance or consolidation journey
Best Business Loans does not provide loans; we introduce and match UK businesses to lenders and brokers who may offer refinance or consolidation solutions.
Our AI-driven Quick Quote helps you identify which providers are likely to consider your business for restructuring existing agreements.
What we can do for you
We analyse your business profile, match you with suitable lenders or brokers, and help you obtain a Decision in Principle or initial eligibility check quickly.
We also highlight likely exit costs, security implications and practical steps to prepare documentation.
Regulatory and compliance note
Best Business Loans is an independent introducer and not authorised to give regulated lending advice.
We operate in line with FCA principles for clear and non-misleading information and encourage you to seek regulated advice where appropriate.
Ready to get started?
If you want a quick, no-obligation check to see whether refinancing or consolidation could make sense, complete our Quick Quote for a fast eligibility check.
Start here to explore business finance options and connect with lenders who match your needs: https://bestbusinessloans.ai/loan/business-finance/.
Frequently asked questions (short answers)
Can I consolidate both secured and unsecured business debt?
Possibly — consolidation depends on lender appetite and whether you can offer acceptable security or meet credit criteria.
Specialist consolidators may handle mixed portfolios, but terms vary.
Will consolidation affect my credit score?
Applications for new credit typically create searches that can have a short-term impact on credit profiles.
However improved payment performance on a consolidated facility can help creditworthiness over time.
How long does refinancing typically take?
Timescales range from a few days for simple invoice finance switches to several weeks for secured refinances or asset-backed deals.
Early preparation of documents speeds the process significantly.
Key takeaways
Refinancing or consolidating business finance is often possible, but suitability depends on loan type, exit costs, security and your financial position.
Carefully model true savings, consider covenant and security implications, and compare multiple providers — including specialist lenders.
Best Business Loans can help you get an eligibility check and match you with lenders or brokers for a Quick Quote and Decision in Principle.
Complete a Quick Quote to explore whether consolidating or refinancing your existing agreements is the right move for your business.