What Is It?
Business debt refinancing means replacing one or more existing obligations with a new loan — typically from a different lender. The new loan pays off the existing debt, and the business makes payments on the new loan going forward. The goal is usually to secure better terms: a lower interest rate, a longer repayment period (which lowers the per-period payment), or a more manageable payment structure. Refinancing is not guaranteed — it requires qualifying for the new loan, and the new terms must actually be better than the existing ones to make sense.
When It May Make Sense
- The business qualifies for better terms than its current debt
- Current payments are too high and a longer-term loan would reduce the per-period burden
- Interest rates have dropped since the original loan was taken
- The business's credit or financial position has improved, making better terms available
- The business wants to move from short-term, high-frequency payments to a traditional monthly structure
When It May Not Make Sense
- The business doesn't qualify for better terms than it already has
- Refinancing would increase total cost even if it lowers the payment
- The existing debt can't be paid off early (prepayment penalties)
- Taking on new debt to solve a structural cash-flow problem
- The business's financial situation has worsened since the original loan
What Lenders Typically Evaluate
- Current debt schedule and payment burden
- Business revenue and cash flow
- Ability to service the new, refinanced payment
- Credit profile and time in business
- Existing obligation types and whether they can be paid off
- Collateral, where applicable
- Overall debt service coverage ratio
Potential Benefits
- Can lower the monthly payment and improve cash flow
- Can secure a lower interest rate, reducing total cost
- Longer term can reduce per-period pressure
- Can simplify by moving from multiple payments to a single structure (when combined with consolidation)
Risks & Considerations
- Refinancing is not guaranteed and depends on qualification
- A lower payment over a longer term can increase total cost
- Some obligations may have prepayment penalties
- Adding new debt on top of old debt can worsen the situation if not structured carefully
- Some obligations (including certain MCAs) may not be eligible for specific refinance programs
What to Prepare
Common items lenders may request — requirements vary by program and lender.
- Complete debt schedule (lender, balance, payment, term for each obligation)
- Business bank statements and financials
- Information on each existing obligation type
- Business and owner credit information
- Revenue and cash-flow documentation
- Description of the goal (lower payment, lower rate, extend term)
Frequently Asked Questions
Not necessarily. A lower payment depends on qualifying for a structure with better terms — a longer term, a lower rate, or both. A longer term can lower the per-period payment but may increase total cost over the life of the loan. We don't guarantee any payment reduction or qualification.
Refinancing replaces an existing obligation with a new one (often to improve terms). Consolidation combines multiple obligations into a single new loan. The two often happen together — consolidating several debts into one refinanced structure — but they are distinct concepts.
Under SBA SOP 50 10 8, Merchant Cash Advance and factoring arrangements became ineligible for SBA debt refinancing effective June 1, 2025. Businesses should not assume an SBA loan can refinance existing MCA obligations. Alternative private, conventional, or asset-based structures may need to be evaluated.
Explore Your Options
Submit your information and our team will review which available capital structures may be appropriate for your business or project.
Financing is subject to underwriting, eligibility, and approval. Products, terms, and availability vary by program and lender. Submitting information does not guarantee approval or funding. This page is educational and is not financial, legal, tax, or investment advice.