Yes, it's possible to refinance multiple business loans into a single facility if you meet a lender's criteria. This may simplify repayments and improve cash flow, but it's important to compare loan terms, interest rates and any exit fees before deciding if refinancing is the right option.
It's common for growing businesses to have more than one finance facility.
You might have taken out a business loan to expand, financed a new vehicle, opened a line of credit to manage working capital, or entered into an ATO payment plan after a difficult period. Each decision made sense at the time.
But as your business evolves, managing multiple repayments, lenders and due dates can make your finances harder to predict.
If multiple loans are putting pressure on your cash flow, refinancing could help simplify your finances and free up working capital. Here's how it works, when it makes sense, and what to consider before consolidating your business debt.
Is it normal to have multiple business loans?
Yes. Many growing businesses use different finance products for different purposes. For example, your mix might include:
- A business term loan for expansion
- Equipment finance for machinery or technology
- A business vehicle loan
- A line of credit for working capital
- Trade finance for purchasing inventory
- Invoice finance to improve cash flow
- A merchant cash advance
- An ATO payment plan
Over time, a finance structure that once worked well may no longer suit the way your business operates or generates revenue.
Signs your current finance structure may be affecting cash flow
As businesses grow, it's easy for finance arrangements to become more complex over time. You might benefit from reviewing your existing facilities if you:
- Have multiple repayments leaving your account throughout the month
- Find it difficult to predict your cash flow because repayments fall on different dates
- Are still repaying high-cost or short-term finance that no longer suits your business
- Spend more time managing debt than focusing on growth
- Have seasonal revenue but fixed repayments that don't align with your cash flow
- Consistently meet repayments but have little working capital left over
These don't automatically mean you should refinance, but they can indicate it's worth reviewing whether your current lending structure is still working for your business.
How refinancing multiple business loans can improve cash flow
While every situation is different, refinancing may provide benefits in several scenarios.
Lower monthly repayments
By securing a lower interest rate or extending the loan term, you may reduce your monthly repayment obligations, freeing up cash for day-to-day operations.
Keep in mind that extending a loan term can reduce monthly repayments while increasing the total interest paid over time.
Fewer repayments to manage
Managing one repayment is often easier than keeping track of several loans with different lenders, repayment dates and interest rates. This can reduce administrative complexity and make budgeting more predictable.
Replace expensive short-term finance
Some businesses continue using short-term finance long after it has served its purpose.
Refinancing into a longer-term facility with more suitable repayment terms may reduce financial pressure if the new structure better aligns with your cash flow.
Greater flexibility
Depending on the lender and loan product, refinancing may provide access to features like redraw facilities or repayment flexibility that better support changing business needs.
More predictable cash flow
When repayments become more predictable, it can be easier to plan for payroll, supplier payments, tax obligations and future investment.
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Case study: Consolidating three facilities into one
A Sydney pizzeria was generating strong sales but experiencing significant cash flow pressure. The business was juggling repayments across three separate facilities:
- A merchant finance facility
- An ATO payment plan
- Trade finance
Combined, these repayments totalled over $25k a month, limiting the cash available to reinvest in the business.
After reviewing the business's financial position, the three facilities were consolidated into a single redraw loan.
The result:
- Monthly repayments reduced from $25,800 to $5,400
- More than $20,000 per month freed up for working capital
- One simpler repayment replacing three separate facilities
While every business is different, this shows how refinancing can sometimes improve cash flow by creating a lending structure that's better aligned with current business needs.
When refinancing may not be the right choice
Refinancing isn't always the best solution. You may decide to keep your existing finance structure if:
- Your current loans already offer competitive rates and terms
- Early repayment fees outweigh any potential savings
- Extending the loan significantly increases total borrowing costs
- Individual finance facilities serve different purposes, like invoice finance or equipment finance
- Cash flow challenges stem from declining revenue rather than your loan structure
A careful review of your existing debt can help determine whether refinancing is likely to improve your overall financial position.
Alternatives to refinancing
Depending on your situation, you could also consider:
- Renegotiating repayment terms with your existing lender
- Refinancing only one high-cost facility rather than all loans
- Using a business line of credit for short-term working capital needs
- Improving cash flow through invoice finance
- Refinancing equipment separately if it's no longer on competitive terms
The right solution depends on why your cash flow is under pressure and what you're trying to achieve.
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Frequently asked questions
Can you refinance more than one business loan?
Yes. Many lenders allow eligible businesses to refinance multiple existing loans into a single facility, provided the application meets their lending criteria.
Will refinancing reduce my monthly repayments?
It can, but not always. Lower repayments may result from a lower interest rate, a longer loan term or a combination of both. It's important to consider the total cost of borrowing, not just the monthly repayment.
Can I include an ATO payment plan when refinancing?
In some circumstances, yes. Some lenders may allow tax debt or ATO payment plans to be consolidated alongside other eligible business debts, subject to their lending policies.
Does refinancing affect my credit score?
Applying for new finance may result in a credit enquiry. However, the long-term impact depends on your overall financial position and how you manage the new facility.
How often can you refinance a business loan?
There's no fixed limit. Businesses typically refinance when their financial circumstances change or when a different loan structure better supports their goals.
