Refinancing equipment finance
Changing the loan is a decision with its own cost. Here is what to put on the page before you do.
Why owners look at refinancing
The usual reasons are a lower repayment, a different term, releasing cash, or combining several commitments. All are legitimate questions. None guarantees a better outcome.
The cost side of the sheet
- Payout figure. Ask your current lender for it in writing. It is not always the same as the balance on your statement.
- Break or early termination costs. Check your contract.
- New establishment and account fees. They count toward the true cost.
- Total repayments over the new term, not just the new instalment.
- Tax treatment. Ask your accountant, particularly for leases and chattel mortgages.
A lower repayment over a longer term can cost more in total. Compare the total amount payable, then look at the comparison rate (which is designed to include most fees and charges, but not all of them).
Questions to ask before you start
Is the equipment still worth more than you owe? Is it old enough that lenders limit the available term? Is the issue really the loan, or is it pricing, collections or costs elsewhere in the business?
What lenders look at
Typically the age and type of asset, how long the business has operated, your repayment history and your capacity to repay. The ATO’s small business pages at ato.gov.au are a good starting point for the tax questions to take to your accountant.
Next step
If you would like to see what options might exist, you can start a free enquiry. It is general information only on this site, not advice, and approval is never guaranteed.
Want to see what options might exist?
It is free to enquire and there is no obligation. Any finance is subject to lender criteria and approval.