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Business loansLast updated: 15 Jul 2026
Refinance
Refinancing a business loan
Refinancing a business loan means replacing your existing finance, whether that's a loan, invoice finance facility, asset finance agreement or merchant cash advance, with a new deal on better terms. At Capitalise.com, we help you compare refinancing options from over 130 UK lenders, so you can lower your repayments, free up cash flow, or borrow more, without doing the legwork yourself.
Capitalise is trusted by 200,000+ UK businesses
£2bn in funding approved
Regulated by the FCA since 2016
130+ UK business lenders
Powered by Experian business credit data
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What is business loan refinancing?
Business loan refinancing is the process of paying off an existing loan or finance agreement using a new one, usually to get a lower interest rate, a longer or shorter repayment term, or access to extra funds. The new lender pays off your existing balance directly, and you then repay the new facility instead, on whatever terms you've agreed.
Refinancing isn't limited to term loans. Businesses also refinance invoice finance facilities, asset finance agreements, commercial mortgages and merchant cash advances, and can use it to consolidate several separate debts into one single repayment.
When should you refinance a business loan?
You should consider refinancing a business loan when the cost of switching is clearly outweighed by the savings or flexibility you'll gain, for example if your rate, credit profile or repayment needs have changed since you took out your original finance.
Sign | Why it points to refinancing |
|---|---|
Your business credit score has improved | You may now qualify for a lower rate than when you first borrowed |
You're juggling several repayments | Consolidating into one facility simplifies cash flow and admin |
Your current rate is above market average | A business loan interest rates comparison shows what better value looks like |
Your monthly repayments feel tight | Extending the term can lower monthly costs, though it may increase total interest |
You need extra working capital | Refinancing can release additional funds alongside your existing debt |
Your fixed rate deal is ending | Moving before you roll onto a lender's standard variable rate can protect your margin |
What are the benefits of refinancing a business loan?
Lower interest cost
Swapping an expensive facility for one with a better rate keeps more cash in your business each month.
Simpler repayments
Consolidating multiple loans, cards or overdrafts into one facility means a single monthly payment instead of several.
More flexible terms
Extend your term to ease monthly pressure, or shorten it to clear the debt faster, depending on what your business needs now.
Extra working capital
Many refinancing deals let you borrow a little more than you owe, releasing cash for stock, hiring or growth.
Improved cash flow
Lower or more predictable repayments free up capital you can reinvest in day to day operations.
What can you refinance?
Almost any existing business finance can be refinanced, not just a standard term loan. The right route depends on what you currently hold.
What you have now | What refinancing looks like |
|---|---|
Replace with a new loan at a better rate, term or amount | |
Invoice finance facility | Switch factoring or invoice discounting provider for a better advance rate or service |
Asset finance agreement | Refinance the asset for a lump sum, sometimes called sale and leaseback |
Move to a new lender or rate once your fixed term ends | |
Replace with a lower cost loan or a fresh advance on better terms | |
Multiple debts, cards or overdrafts | Consolidate into a single business loan with one repayment |
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How does business loan refinancing work?
Refinancing works by using a new loan to pay off your existing finance, then repaying the new lender under the agreed terms instead. In practice, this usually means your new lender settles the outstanding balance with your current provider directly, so there's no gap where you owe money to both at once.
The exact process varies by product. Refinancing a straightforward loan is usually quick, since it's just a matter of paying off one balance with another. Refinancing invoice finance or asset finance takes a little longer, as ledgers, assets or security need to transfer between lenders. Your funding specialist will talk you through the timeline for your specific facility before you commit.
Business loan refinancing rates and costs at a glance
What you'll pay to refinance depends on your current facility, the new lender, and whether your finance is secured or unsecured.
Cost | Typical range | When it applies |
|---|---|---|
Early repayment charge on existing facility | 0% to 5% of outstanding balance | Set out in your current loan agreement, check before you commit |
Arrangement fee on new facility | 1% to 3% of the loan value | Charged by most lenders when you take out new finance |
Legal and valuation fees | £500 to £5,000 | Usually only for secured lending, such as a commercial mortgage or asset refinance |
New interest rate | Around 6% to 10% APR secured loans, 9% to 30%+ APR unsecured loans | Depends on your credit profile, security and loan size |
Example refinancing savings
Here's what refinancing could save in practice, based on moving an existing balance to a lower rate.
Outstanding balance | Existing rate | New rate | Estimated monthly saving | Estimated saving over remaining term |
|---|---|---|---|---|
£20,000, 2 years remaining | 22% APR | 12% APR | £86 | £2,064 |
£50,000, 3 years remaining | 18% APR | 9% APR | £198 | £7,128 |
£100,000, 5 years remaining | 12% APR | 7% APR | £397 | £23,820 |
These are illustrative examples only, not a quote. Your actual savings depends on your outstanding balance, remaining term, current rate and the rate you're offered.
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Am I eligible to refinance a business loan?
Most lenders on the Capitalise panel require a business to:
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What documents do you need to refinance a business loan?
Having these ready speeds up your refinancing application:
What are the advantages and disadvantages of refinancing a business loan?
Advantages
Disadvantages
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Are there government backed options for refinancing?
Some existing lending can be refinanced through the Growth Guarantee Scheme, delivered with the British Business Bank, where doing so puts your business on a more stable financial footing. Refinancing under the scheme is assessed as a new application, subject to standard eligibility and the lender's own criteria, and can be done with your existing lender or a different accredited one. Capitalise works with accredited lenders on the scheme and can help you check if refinancing this way is an option for your business.
How do you apply to refinance a business loan with Capitalise?
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Check your eligibility
Sign up for free, with no effect on your credit score, and tell us what you currently hold, whether that's a loan, invoice finance facility, asset finance agreement or several debts.
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Compare your offers
Our platform matches you with the lenders from our panel of 130+ most likely to offer better terms, and a dedicated funding specialist compares them with you, including any early repayment charges on your existing facility.
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Get refinanced
Once you choose an offer and confirm your details, the new lender arranges settlement of your existing balance, and you start repaying your new facility on the improved rate, term or amount you've agreed.
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Find a better deal by refinancing your business loan with Capitalise