It is important that businesses minimise the cost of their debt especially when economic circumstances cause a significant rise in operating costs.

There are a lot of considerations for business owners but a change in the debt arrangements, for instance, can convert short-term loans into longer-term debt which can assist cashflow and provide more working capital.

Importantly, businesses need to understand the costs and benefits of refinancing before setting up the new arrangements. It can be an important strategic decision for the business, so it is important that you also seek advice from your business advisors including your accountant.

For many small businesses the initial financing arrangements put in place at start-up are still in place many years later.

For example, a company starts off with a simple overdraft facility and may arrange for several modest increases in the facility over time, without consideration of the suitability of the debt arrangements to its current and future needs.

Small business owners and their advisers should review existing debt finance arrangements on a regular basis to ensure that the debt facilities suit the life cycle of the business.

Whether you are experiencing the rapid growth after start-up, expanding, considering exporting or are a mature business, banks can help you with products and services which meet your needs.

To assist small businesses with this important decision, the ABA and CPA Australia have produced a fact sheet - Refinancing your debt.