Finance question
Can I refinance a business loan to extend the term?
Often yes. A short business loan with high monthly repayments can usually be refinanced onto a longer term, which spreads the balance over more months and lowers each payment. The trade-off is more interest over the life of the loan, so it is a cashflow move, not a saving. Subject to lender assessment.
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The short answer
Stretch the term, ease the month
Short-term business loans are built for speed, not comfort. A 12 or 18 month facility puts a large repayment on the account every month, which is fine when trade is strong and painful when it is not. Refinancing onto a longer term takes the same balance and spreads it over more months, so each individual repayment drops.
Be clear on the trade-off. A longer term almost always means more total interest paid, because the money is borrowed for longer. That can still be the right call when the goal is to free up monthly cashflow, protect a wages run or ride out a quiet season. It is the wrong call if the only aim is to pay less overall.
The structure sets the ceiling on the term. A loan secured against equipment usually extends in line with the asset's working life. A loan moved onto property security can run considerably longer at a single-digit rate. Which route fits depends on what you can offer as security and how long you actually need the relief.
Do you qualify?
When extending the term makes sense.
Tight monthly repayments
A short loan whose payment is squeezing your cashflow.
An asset or property
Equipment or property to secure the longer facility.
An active ABN
Sole traders and companies both qualify.
A workable loan to move
Most existing facilities can be refinanced, subject to any exit terms.
Why a longer term helps
Smaller repayments
The same balance across more months means less leaves the account each time.
Cashflow headroom
Freed-up monthly cash can cover wages, stock or a slow patch.
Rate can improve too
Moving onto property security can drop the rate into single digits as well.
A real example
A cafe took a $90k loan on a 12 month term to fit out, with repayments straining every week. Refinanced onto a longer term secured by equity in a rental property, the monthly figure falls sharply, giving the owner room to trade through winter. More interest overall, but the month is manageable. Illustrative only.
Common questions
Frequently asked questions
Will extending the term cost me more?
Usually yes in total interest, because you borrow for longer. It lowers the monthly payment, so it is a cashflow decision rather than a saving.
How much longer can the term go?
It depends on the security. Equipment-secured terms track the asset's life; property-secured terms can run considerably longer at single-digit rates.
Can I refinance a loan I only took out recently?
Often yes, though we check for any early exit or break costs on the current facility before recommending the move.
Do I need financials to extend the term?
Many property-backed refinances need no up-to-date financials. The security carries the deal, subject to lender assessment.