Stuck in an expensive facility? The refinance and exit routes
Refinancing a business facility means clearing one or more existing agreements and replacing them with a new one, usually to cut the cost, consolidate stacked debt, or escape a contract that no longer fits. The route depends on what you are in: an expensive merchant cash advance, a high-rate term loan, an asset agreement with a heavy early-exit charge, or a bridge running past its term. The first number to establish is always what it costs to leave the current facility, because a refinance only helps if the all-in cost of switching beats staying put.
Founder & Managing Director, Muswell Rose, FundBiz
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind FundBiz. His background runs through commercial finance, mortgages and fintech, including as managing director of an invoice finance business. He oversees FundBiz's specialty finance comparison and the logic behind how businesses are matched to lenders.
Last reviewed: 23 June 2026
What you are in, and the way out
Find the facility you want to escape in the table below. Each row links to the FundBiz page that covers that route in detail. FundBiz is a specialty-finance broker in the Best Business Loans group: we match limited companies, LLPs and partnerships of four or more to UK lenders whose criteria fit the business as it trades now, not as it looked when the original facility was signed.
| Facility you want out of | Why it hurts | Route off it | Read more |
|---|---|---|---|
| Merchant cash advance (MCA) | A factor rate of 1.30 to 1.45 over a short term works out to a very high effective annualised cost, often into triple digits (illustrative, individual costs vary), and a fresh top-up resets the clock instead of clearing the debt. | Refinance the remaining factored balance into a structured term loan, or consolidate a stacked MCA into a single facility | Mid-MCA restructuring |
| Stacked MCAs (two or more at once) | Two daily withholds against the same card take rarely leave enough float to trade, and a second advance is the single most common trigger for default and personal-guarantee enforcement. | Consolidation into one facility, or a structured-loan refinance that clears both balances on the same day | How MCA works |
| High-rate unsecured term loan | A rate taken when the business was younger or the file was thinner may sit well above what your current trading and credit profile would now command. | Refinance to a lower-rate facility once two years of accounts and a cleaner profile are in place, after checking the early repayment charge | All products |
| Asset finance or hire purchase | Early exit can be priced on a rule-of-78 basis that front-loads the interest, so leaving early in the term is expensive unless equity has built up. | Asset refinance or sale and leaseback to release equity and reset the term against current market value | Asset refinance |
| Bridging loan running past its term | Bridging is short-term by design. Past the agreed term the rate steps up sharply and default interest can apply. | Refinance the bridge onto a term facility (bridge-to-term) before the redemption date passes | Bridging loans |
| A facility you simply want to leave | Sometimes the issue is service, covenants, or a lender that has withdrawn the product line and will not renew on workable terms. | A whole-of-market re-match to a lender whose criteria and pricing fit the business as it trades today | Run the matcher |
The MCA escalator: why an advance is the most common thing to refinance
A merchant cash advance is priced with a factor rate, not an APR. A factor of 1.30 on a £50,000 advance means you repay £65,000 in total, however long it takes. Because repayment is taken as a percentage of daily card takings, strong sales compress the same fixed cost into a shorter window, which pushes the effective annualised cost up.
A 1.30 factor repaid over six months is a 30 percent cost over half a year; annualised on a simple basis that looks like roughly 60 percent, but because repayment shrinks the balance as you go the true APR is materially higher, often above 100 percent on a short term.
The same factor over twelve months works out lower, but is still far above a term loan. The trap is not the first advance. It is the top-up: taking a new advance before the first is cleared rolls the unpaid factored cost into a larger balance and resets the clock.
For the full method, and why two MCAs at the same factor rate can carry very different effective APRs, FundBiz publishes an independent guide to MCA factor rates and a factor-rate to APR converter. Both are editorial, not a sales page, so you can check the maths before you act.
Read the independent breakdown before you refinance:
Check the exit cost first
Before a refinance can save money, establish exactly what it costs to leave the current facility. Request a formal settlement figure in writing and note its expiry, usually 14 to 30 days. Exit costs vary by facility type:
- Merchant cash advance: some lenders charge no early-settlement fee and accept full repayment of the remaining balance at any time; others apply an early-settlement charge on part of the remaining factored cost. The contract wording matters.
- Unsecured term loan: often one to three months of interest, or a flat percentage of the outstanding balance with some challenger lenders.
- Asset finance and hire purchase: may use a rule-of-78 calculation that front-loads interest, so exiting early in the term is expensive.
- Bridging: usually open to early redemption, but watch for a minimum interest period.
A refinance is worthwhile only when the all-in cost of the new facility, including every fee and the early repayment charge on the old one, comes out below the cost of running the existing facility to its natural end.
When refinancing wins, and when to pause
- Your profile has improved since you signed. Two years of accounts, a cleaner credit file or lower other debt can unlock pricing the original facility could not.
- You are servicing two or more advances. Consolidation into a single facility usually beats stacking, both on cost and on the cashflow shape.
- The exit cost is small relative to the saving. A saving of less than five percent of the balance is often not worth the management time and the fresh hard search, unless you also need to restructure the schedule.
- Pause if the real issue is solvency, not cost. If several lenders have already declined inside 90 days, the answer is usually a rescue conversation with a licensed insolvency practitioner, not more debt. We signpost; we do not advise on insolvency.
A neutral broker, not a lender
FundBiz is an independent comparison and introducer service operated by Best Business Loans Ltd (Companies House 16833937). We are paid by the lender panel, not by the borrower, and we do not promise approval: every lender underwrites on its own criteria. What we can do is match the facility you want to escape to lenders whose terms fit the business today, so you do not waste a hard search on a refinance that was never going to clear. Representative pricing is illustrative and subject to status; finance is for limited companies, LLPs and partnerships of four or more.
Common questions
Can I refinance a merchant cash advance into a term loan?
Often yes, though it is harder than refinancing during stable trading. Lenders typically want two or more years trading, turnover above their threshold, no recent CCJ, and a decline that reads as temporary rather than structural. A term loan replaces the variable daily withhold with a fixed monthly payment, which usually lowers the effective cost and steadies cashflow.
Should I take a top-up on my existing MCA instead?
Be careful. A top-up rolls the unpaid factored cost of the first advance into a larger balance and resets the term, which is how an advance becomes an escalator. Clearing or consolidating the existing balance is almost always cheaper over the full cycle than stacking a fresh advance on top.
How do I work out whether refinancing actually saves money?
Get the current settlement figure, add every fee on the new facility and any early repayment charge on the old one, then compare that total against the remaining cost of staying put. If the saving is marginal, factor in the fresh hard search and the management time. For MCA specifically, convert the factor rate to an equivalent APR first so you are comparing like with like.
Will refinancing hurt my business credit?
The new lender runs a hard search, which shows on your file for around twelve months and, in most cases, on any personal guarantors. Settling existing debt in full is recorded positively, so the net effect over time is usually neutral or slightly beneficial if you keep the new repayments up. Several hard searches in a short window do compound, so apply once to a correctly matched lender.
Do you charge to find a refinance?
No. There is no fee to the borrower. FundBiz is a neutral introducer paid by the lender panel, and we may earn commission from a partner lender if your application proceeds.
Sources
- British Business Bank: Small Business Finance Markets report (UK smaller-business finance market data).
- UK Finance: Business Finance Review (quarterly UK SME lending data).
- Bank of England: Bank Rate (the base rate underpinning UK commercial lending costs).
Run the refinance matcher
Two minutes, soft search only. Tell us the facility you want out of, the balance remaining and your trading position. We score the case against each lender on the panel and surface the refinance and consolidation routes most likely to clear it.
Open the refinance matcher →Related routes
- Merchant cash advance How MCA pricing works, factor rates, and who it fits before you commit or refinance.
- Asset refinance Release equity from owned plant or vehicles, or reset the term against current value.
- Sales down mid-MCA Restructuring options when trading drifts down while the advance is still being repaid.
- Declined? Match by reason If a mainstream lender turned the refinance down, route by the reason instead.
Last reviewed: 23 June 2026. By Oliver Mackman. FundBiz is an independent comparison and introducer service, not a lender, and does not guarantee approval. Representative pricing is illustrative and subject to status. Finance for limited companies, LLPs and partnerships of 4+ only.