Refinance

Refinancing is replacing an existing facility with a new one, typically to secure better terms, extend a term approaching maturity, release equity, or move away from a lender that is no longer the right fit for the borrower's current circumstances. In business and commercial lending, refinance is also commonly reactive rather than purely opportunistic — clearing an ATO debt before it escalates, resolving a facility that has moved to default interest, or exiting a short-term product such as a caveat loan once a longer-term facility can be arranged. A refinance lender assesses the transaction much like any new facility, but pays particular attention to the reason for the move, since a refinance driven by financial distress is assessed differently, and by a different part of the lender panel, than one driven by simply wanting a better rate. Existing lenders must be repaid in full, or a documented priority arrangement agreed, before or at the point a new facility settles, which is a standard but sometimes time-consuming part of any refinance.

Related

ATO debt refinance · Debt restructure & workout loans · Settlement