Can I refinance an existing business loan?

2 min read

YesRefinancing is common

Better termsLower cost, longer term, flexibility

Check costsWatch ERCs and total cost

When refinancing makes sense

The usual reason to refinance is that your company is in a stronger position than when the original loan was taken — more trading history, steadier revenue, a clean repayment record — so better terms are now within reach. Refinancing can lower the cost, lengthen the term to ease monthly pressure, or move you from a rigid loan onto a more flexible revolving facility. It can also consolidate several debts at once — see can I consolidate my business debts. The guide to how to refinance business debt walks through the practicalities.

Check the early-repayment position

Before refinancing, look at whether the existing loan carries an early-repayment charge for settling it ahead of term. Some loans do, some do not, and the size of any charge affects whether a switch is worthwhile. See can I repay a business loan early for how this works. If there is a charge, factor it into the comparison — the saving from the new terms needs to clear that cost before the refinance is a net gain.

Compare total cost, not just the rate

A lower headline rate can still cost more if the term is much longer, because you pay over more periods. The honest comparison is total cost to clear: what you would pay to finish the current loan versus the new one, including any early-repayment charge. Lengthening the term to reduce monthly outgoings is a valid reason to refinance, but go in clear-eyed about the total. Work it through with the true cost of borrowing calculator so the decision rests on the full figure.

What this means for your company

If your UK limited company has grown since taking out a loan, refinancing onto better terms can be a smart, low-drama way to cut cost or free up cash flow. Credicorp lends to the company itself and takes no personal guarantee, reassessing the business on its current trading. Check for any early-repayment charge on the old facility, compare the total cost rather than just the rate, and make sure the new arrangement genuinely leaves the company better off before you switch.

Frequently asked questions

Will refinancing cost me anything?

It might. The main thing to check is whether the existing loan carries an early-repayment charge for settling it ahead of term. If it does, factor that into the comparison — the saving from the new terms needs to clear that cost to make the switch worthwhile.

Can I refinance to lower my monthly repayments?

Yes. Lengthening the term reduces the monthly outgoing, which can ease cash flow. Just be aware that a longer term usually means more total cost over the life of the loan, so weigh the monthly relief against the overall figure.

Is it worth refinancing for a small saving?

Only if the saving clearly beats any early-repayment charge and the effort involved. Compare the total cost to clear each loan, not just the headline rate, and switch when the full picture leaves the company genuinely better off.