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Glossary Term

Refinancing

Replacing an existing loan or lease with new terms.

All glossary terms

In short

Refinancing means replacing an existing loan or lease with new terms — to lower payments, free up cash from owned equipment, or consolidate multiple debts into one.

Why businesses refinance

Refinancing restructures debt you already have. Common goals include:

  • Lower monthly payments by extending the term or securing a better rate.
  • Free up cash from equipment you've paid down or own.
  • Consolidate several payments into a single, simpler one.
  • Improve terms if your credit or the market has strengthened.

Reading a refinance honestly

Lower payments feel good, but they can come from a longer term that raises total interest — so a genuine saving isn't always what it looks like. Compare the total remaining cost of your current deal against the total cost of the new one, including any fees. Refinancing is worthwhile when it truly lowers your cost or frees up capital you'll put to productive use, not just when it lowers the monthly number.

Common questions

Will refinancing actually save me money?

It depends. A lower payment from a longer term can cost more overall. Compare the total remaining cost of the old deal to the new one, including fees.

Can I refinance to get cash out of my equipment?

Yes — refinancing or a sale-leaseback can unlock value from equipment you've paid down or own, turning it into working capital.

General information only. This page is educational and does not constitute financial, legal, or tax advice. All financing is subject to credit review and lender approval. Rates, terms, and eligibility vary by applicant, asset, and lender, and are not guaranteed. Any figures or examples are illustrative. Please speak with a qualified advisor about your specific situation.