Refinancing expensive business debt into one manageable facility

How does a business end up with too many repayments?

Usually one reasonable decision at a time. A short unsecured loan to cover a slow month. A merchant cash advance for a fit-out. A second short-term loan when the first one’s repayments made the next slow month worse. An ATO payment plan. A business credit card that never quite gets cleared.

Each made sense on its own. Together, they can mean daily and weekly repayments eating a large share of every deposit, leaving too little for wages, suppliers and tax. The business may be trading well — and still be short every week.

Signs your debt needs restructuring

• More than two or three funders debiting your account
• Daily or weekly repayments that leave the account near zero
• Taking new short-term funding to meet existing repayments
• ATO debt growing because tax money goes to lenders
• Suppliers being paid later and later

If two or more of these sound familiar, it’s worth looking at consolidation before the stack grows again.

How consolidation works

1. List every debt — lender, balance, repayment amount and frequency, payout figure.
2. Work out the total — including any early payout costs.
3. Find one facility large enough to clear them all, on a term the business can sustain.
4. Settle — the new lender pays out the old ones.
5. Repay one facility on a predictable schedule.

Before (illustrative)	After (illustrative)
Unsecured loan A — daily repayments	One property-secured facility
Unsecured loan B — weekly repayments	Monthly repayment
Merchant cash advance — share of card sales	Card takings back in the business
ATO payment plan	ATO debt cleared
Credit card balance	Cleared

Why property-secured refinancing usually works best

Property security allows a larger single facility, a longer and more sensible term, and pricing that reflects lower risk than a stack of unsecured advances. First mortgage and second mortgage business loans range from $20,000 to $5,000,000. Where speed matters — an ATO escalation, a funder threatening default — $20k to $250k is possible the same day.

Without property, consolidation is harder but sometimes possible by refinancing several small debts into one larger unsecured loan, if the business’s statements support it.

Fix the cause, not just the stack

Consolidation buys breathing space. It doesn’t, by itself, fix why the business kept needing short-term money. Use the breathing space to look at:

• Margins — are prices covering costs, including finance?
• Debtor days — are customers taking too long to pay?
• Stock — is cash sitting in slow lines?
• Tax — are GST and PAYG being set aside?
• Buffer — would a modest line of credit prevent future stacking?

The working capital gap calculator is a good place to start.

An illustrative example

A courier business is repaying three short-term funders and a merchant cash advance, with combined repayments of about $2,100 a day, plus an ATO plan. Deposits average $9,000 a day, but after repayments, fuel and wages, the account hits zero most weeks. The owners refinance $310,000 of debts into a second mortgage over their home, with one monthly repayment far lower than the previous daily total. The ATO debt is cleared at the same time. (Illustrative only.)

Too many lenders in your bank feed? Let’s simplify it.

What to have ready

• A list of every debt with payout figures
• Recent business bank statements
• Property details and what’s owed on it
• Any ATO payment plan details
• A short explanation of how the stack built up

Calculating the real saving

Before consolidating, compare the before and after in dollars, over the same period:

1. Total remaining repayments on every existing debt if you keep them to term.
2. Payout costs — any early repayment fees, plus the ATO balance and card balances.
3. The new facility’s total cost over its planned term — interest, establishment and legal fees.
4. Cash flow difference — what you’ll repay each month under the new structure compared with now.

Sometimes the total saving is large. Sometimes it’s modest, and the real benefit is cash flow: replacing daily debits with one monthly repayment so the business can breathe. Both are valid reasons, as long as you know which one you’re getting.

Talking to existing funders

Request payout figures from every funder in writing. Some short-term funders quote a figure that includes remaining fees; others discount for early payout. Knowing the exact figures means the refinance amount is right first time and settlement isn’t delayed while numbers are chased.

Don’t rebuild the stack

The most common mistake after consolidation is taking a new short-term advance within a few months, because the original cash flow problem was never fixed. Put guardrails in place:

• a modest line of credit for genuine gaps
• GST, PAYG and super moved to a separate account each week
• a monthly review of margins and debtor days
• a rule that any new borrowing is discussed with your accountant first

Ready to get your cash flow back?

One manageable repayment can change how a business feels to run. Finding out whether consolidation works for you involves no credit check, and we don’t fire your details out to multiple lenders — a real person goes through your debts with you and calls you back. Please list your debts accurately on the form so the refinance amount we discuss is right first time. See if your business qualifies.