REFINANCING AND RESTRUCTURING
Commercial Refinancing and Debt Restructuring
When the facility no longer fits the business
Most commercial facilities are structured around the business as it was at the time. Businesses move. Revenue grows, security positions change, a facility taken out in a hurry becomes the expensive one on the schedule, and a structure that suited a two entity group starts to creak once there are six.
Refinancing is the mechanism. Restructuring is the thinking that goes in front of it. Moving debt from one lender to another achieves very little if the shape of the debt was the problem in the first place.
When Refinancing Is Worth Doing
Not every refinance is worth the cost of doing it. Break fees, valuation costs, legal costs and establishment fees all sit against whatever you save, and a facility with two years to run at a slightly higher margin may well be left alone.
The transactions where refinancing changes something meaningful usually share one of a handful of characteristics. The pricing has drifted well away from what the business could achieve today. Equity has built up in a property or an asset and is sitting idle while the business funds growth from cashflow. A short term or private facility was taken out to solve a problem and now needs a permanent home. Covenants or annual reviews are consuming management time out of all proportion to the debt. Or the security is cross collateralised in a way that makes every future transaction harder than it needs to be.
We work through the arithmetic before recommending anything, because the honest answer is sometimes that you should stay where you are.
What Restructuring Actually Involves
Restructuring looks at the shape of the debt rather than the name on it.
That might mean separating facilities that have been bundled together, so that one property can be sold or refinanced without unwinding everything else. It might mean matching the term of the debt to the life of the asset it funded, rather than carrying equipment on a facility that reprices annually. It might mean releasing a personal guarantee that has outlived the risk it was written for, or replacing an expensive short term facility with a term structure the business can actually plan around.
For groups with multiple entities and trusts, restructuring is often as much a presentation exercise as a financial one. Credit teams price uncertainty. A group structure explained clearly, with the related party positions set out and the intercompany flows reconciled, is assessed on its merits rather than on a risk margin applied for lack of clarity.
Refinancing Out of Short Term and Private Debt
Short term and private facilities do a specific job. They fund a purchase that could not wait, bridge a settlement, or carry a project through a period when a bank could not move. They are expensive by design, and they are meant to end.
The exit is where these transactions succeed or fail. A private facility with no funded pathway out is a problem waiting for a date. We work on refinances out of private and short term debt regularly, and the earlier that conversation starts the better the options are. Waiting until the final month narrows the field to whoever can move fastest, which is rarely whoever is cheapest.
Private and Non-Bank Lending covers the other side of this, being when short term funding is the right answer in the first place.
Releasing Equity for Growth
Equity sitting in a commercial property or an asset base is capital doing nothing. Releasing it can fund a deposit on a second premises, an acquisition, a plant upgrade, or the working capital a growing business needs before its debtors catch up.
Lenders will want to know where the money is going. A clearly stated purpose supported by numbers is received very differently to a general request for cash out, and the difference shows up in both the approval and the pricing. This is the part of the transaction where preparation earns its keep.
What We Bring to a Refinance
The Arithmetic First
We model the full cost of moving, including break costs, valuation, legal and establishment fees, against the benefit over a realistic holding period. If it does not stack up, we say so.
Structure, Not Just Pricing
Rate is one variable. Term, amortisation, covenants, review cycles, security and guarantees all shape what the business can do next, and they are where most of the value sits.
Complex Groups Presented Properly
Multi-entity structures, trusts and related party positions are read as risk when they are not explained. We do the untangling before the lender has to.
A Funded Exit
For clients coming out of short term or private debt, we plan the exit as a transaction in its own right rather than a deadline to be met.
How We Work With You
1. Review
We map your existing facilities, security positions, covenants and guarantees, and identify what is actually costing you, in money and in flexibility.
2. Model
We compare the current position against realistic alternatives across our panel, including the full cost of moving, so the decision is made on numbers rather than on a headline rate.
3. Execute and Review
We prepare the submission, manage the discharge and settlement process, and stay across the facility as the business changes.
What Clients Say
“Yasmine has been a fundamental part of our financial business growth over the past 12 months. We have been fortunate enough to have Yasmine provide us with her wealth of financial knowledge. Since working with Yasmine, we have been able to improve our cash flow, and we now have options to reduce our overhead payments too. Yasmine has helped us to feel more confident in making financial decisions and has taken the time to explain the best options thoroughly and to reduce any overwhelm or angst when making these decisions. Not only is Yasmine a wonderful broker, but she is also a very caring and thoughtful person. She is very easy to talk to, and she really makes it a priority to understand how she can assist in the best way possible. I would highly recommend Yasmine as an ethical impact broker for your business requirements.”
Business Owner, Building Services Industry | Victoria
Testimonials reflect the experience of individual clients. Results vary and are not a guarantee of any outcome.
Frequently Asked Questions
It depends on whether the benefit outweighs the cost of moving. Break costs, valuation, legal and establishment fees all sit against the saving, and a facility with a short time left to run often should be left alone. The stronger cases for refinancing are a material pricing gap, equity that could be working, a short term facility that needs a permanent home, or a security structure that is blocking your next transaction.
Restructuring changes the shape of the debt rather than simply the lender. That can mean separating cross-collateralised facilities, matching the term of a loan to the life of the asset it funded, consolidating several facilities into one, releasing a guarantee that is no longer warranted, or replacing short term funding with a term structure the business can plan around.
Often, yes, and it can reduce both cost and administration. What matters is whether consolidation improves the position or simply extends the term on debt that should be repaid sooner. Rolling short term operating debt into a long term facility secured by property lowers the repayment while increasing what you have put at risk, so the trade off needs to be understood before you commit.
By starting early and treating the exit as a transaction rather than a deadline. Mainstream lenders will want to understand why the private facility was taken out, what has changed since, and how the business performed while it was in place. A clean conduct record on the existing facility helps considerably. Leaving it to the final month narrows the field to whoever can move fastest.
Formal applications are recorded on your commercial credit file, and several applications in a short period can affect how later lenders read your position. Approaching the right lender first, rather than testing several, protects the file as well as your time. How We Work
The information on this page is general in nature and does not take into account your objectives, financial situation or needs. All finance is subject to lender approval, eligibility criteria, terms and conditions. Fees and charges apply. We may receive commission from lenders and referral partners in connection with facilities we arrange or refer. Nothing on this page constitutes financial, tax or legal advice, and we recommend obtaining independent advice before making any decision.
Ethical Finance Australia Pty Ltd (ABN 12 601 144 932) trading as Impact Brokers and Yasmine Shah (Credit Representative No. 540047) are Authorised Credit Representatives of QED Credit Services Pty Ltd (ACL 387856).
Start the Conversation
If you are carrying facilities that no longer suit the business, or you are approaching the end of a short term loan, the useful time to talk is before the pressure arrives.
Bring your current loan schedule, your security positions and your recent financials. You will leave with a clear view of whether refinancing is worth doing and what a better structure would look like.