Refinancing business debt on your own terms

Why do established SMEs refinance?

Refinancing isn’t only about price. For an established business, the most common reasons are structural:

• The bank is tightening. Limits cut at review, requests for more security, or a notice that a facility won’t be renewed.
• Covenants no longer fit. The business has changed shape — an acquisition, a new model, a weak year — and the old ratios bite.
• Facilities are a patchwork. Overdraft, term loan, several equipment contracts, a merchant advance and an ATO arrangement, each with its own repayment rhythm.
• Security is over-committed. The bank holds mortgages over more property than the debt justifies, and owners want some released.
• The business has outgrown its lender. Growth, acquisitions or a change of strategy the current bank won’t support.
• Cost. Short-term or expensive debt that made sense in a crisis now drags on margins.

The RBA’s October 2025 Bulletin noted that the non-bank share of SME lending has increased strongly since the start of 2022. For many established SMEs, a refinance now means genuinely comparing bank and non-bank structures, not just moving between banks.

Start with a complete debt schedule

Before approaching any lender, list every obligation the business and its owners have given for it.

Facility	Lender	Balance	Repayment	Maturity	Security	Guarantors	Break / exit costs
Overdraft	Bank A
Term loan	Bank A
Equipment finance ×3	Various				PPSR
Short-term loan	Non-bank		Daily
ATO payment arrangement	ATO		Monthly		—	—	—

A lender will build this anyway. Doing it yourself shows control of the balance sheet and exposes surprises early — an old PPSR registration, a guarantee nobody remembered, a fixed-rate period with break costs.

Refinance everything or only part?

Full refinance. One lender, one set of documents, one relationship. Suits businesses leaving a bank entirely or consolidating a patchwork. See consolidating business debt.

Partial refinance. Keep the well-priced core with the bank and refinance the problem piece. For example, clearing expensive short-term loans with a property-backed facility.

Add rather than replace. A second-ranking facility behind the bank adds capacity without a full move, if the bank consents.

Property-secured options range from $20,000 to $5,000,000 via first mortgage, second mortgage or caveat. Unsecured options for trading businesses typically range from $5,000 to $500,000.

If you’re weighing which route suits, get a specialist’s read on your debt schedule — it doesn’t touch your credit file.

What slows a refinance down?

1. Discharge processes. The outgoing lender controls the timing of its payout figure and security release.
2. Multiple securities. Each property, guarantor and PPSR registration adds documents.
3. Valuations. Particularly for commercial, rural or specialised property.
4. Incomplete financials. Late accounts, missing management accounts or unexplained related-party transactions.
5. ATO position. Lodgements behind or unmanaged debt. See ATO debt for established businesses.

Starting six to twelve months ahead of a maturity date gives room for all of this. If you’re closer than that, see what to do when the bank won’t renew.

Illustrative refinance

Illustrative only; no real business. A $20 million turnover building-products distributor carries a bank overdraft and term loan, three equipment contracts, and a short-term non-bank loan taken during a difficult winter. Combined weekly repayments are squeezing cash flow, and the bank has flagged a covenant concern.

The directors refinance the short-term loan and two equipment contracts into a property-backed term facility over the business’s warehouse, restructure the bank overdraft into a smaller revolving limit the bank is comfortable holding, and put the ATO account onto a clean footing in the same transaction. Weekly outflows fall, the covenant is back within range, and the bank relationship continues on simpler terms.

Documents to have ready

• Two to three years of financial statements and tax returns
• Year-to-date management accounts
• The debt schedule above, with recent statements
• Aged debtors and creditors
• ATO portal statements
• Property details for any security offered
• A short explanation of why you’re refinancing and what the new structure should achieve — our guide to writing a funding proposal helps

Bank, non-bank or both?

The choice isn’t binary. Many established SMEs end up with a split: a bank for transaction banking, merchant facilities and perhaps a smaller overdraft, and a non-bank or private lender for a property-backed term facility the bank wouldn’t size. Each has strengths.

Consideration	Bank	Non-bank / private lender
Pricing	Usually lower for strong files	Usually higher, priced for flexibility
Assessment	Policy-driven, cash-flow and covenant focus	Security and exit weighted more heavily
Speed	Can be slower for complex files	Often faster for property-backed structures
Tolerance for a weak year or ATO debt	Limited	Considered case by case
Ancillary services	Full transaction banking	Lending only

A common path is to refinance to a non-bank structure now, rebuild the accounts for a year or two, then move part or all of the debt back to a bank on better terms. Planning that exit from the start — with a facility term and early repayment terms that allow it — keeps the option open.

Considering a refinance?

If your debt structure no longer fits the business, a planned refinance is one of the most valuable things a finance lead can deliver. Share the debt schedule, recent numbers and the security available.

There’s no credit check at enquiry. Your financials aren’t shopped across a panel of lenders; one specialist reviews them and approaches the funder that suits the structure. Please complete the form accurately — especially existing debt and security — so the first conversation is about options, not corrections. Start your refinance enquiry.