How to Refinance Your Business Loan in Ontario

Refinancing a business loan can help you reduce interest costs, free up cash flow, and better align your repayment terms with your current goals. If you’re a small or medium-sized business owner in Ontario, here’s what you need to know—and how to do it effectively.

Why Refinance a Business Loan?

Refinancing allows you to replace your existing business loan with a new one—ideally with better terms. Business owners typically refinance to:

• Lower interest rates
• Reduce monthly payments
• Extend or shorten loan terms
• Improve cash flow
• Consolidate multiple debts
• Access equity for business reinvestment

Example:

Let’s say your current equipment loan has a high interest rate from when your credit score was lower. Now that your financials have improved, refinancing could cut your rate by 3% or more—saving thousands over the life of the loan.

When Does It Make Sense to Refinance?

You should consider refinancing if:

• Your business credit profile has improved
• You’re paying a higher-than-average interest rate
• You need to reduce monthly expenses
• You want to consolidate equipment or truck loans
• You’re approaching the end of a term and want better renewal terms

In Ontario, many businesses choose to refinance as part of a growth plan—whether upgrading trucks, expanding operations, or preparing for seasonal cash flow cycles.

Types of Refinancing Options in Ontario

Refinancing options depend on the asset, the loan structure, and your financial health. In Ontario, typical business refinancing includes:

1. Sales-Leaseback

Convert owned equipment or trucks into working capital by selling them to a lender and leasing them back.

• Ideal for: Trucking, construction, logistics companies
• Learn more: Refinancing & Sales-Leaseback

2. Term Loan Refinance

Swap a short-term high-interest loan with a longer-term, lower-rate loan.

3. Debt Consolidation

Combine multiple debts (credit cards, merchant advances, equipment loans) into one manageable loan.

4. Working Capital Refinance

If your working capital line is maxed out, refinancing can reset it, freeing up liquidity for new investments.

• Explore: Line of Credit & Working Capital

Step-by-Step: How to Refinance Your Business Loan

Step 1: Evaluate Your Current Loan

• Know your current balance, interest rate, term, and repayment schedule
• Check for early repayment penalties

Step 2: Review Your Financial Health

• Update financial statements and cash flow projections
• Check your business and personal credit scores
• Organize documents like tax returns, ownership charts, and equipment lists

Step 3: Choose the Right Refinancing Option

• Equipment or truck refinancing? Consider a sales-leaseback
• Need short-term relief? Look into term extensions or working capital lines

Step 4: Get a Valuation or Appraisal

• For asset-backed refinancing, appraisals of trucks, trailers, or equipment may be required

Step 5: Apply With a Specialized Lender

General banks may not understand your industry. Work with a lender or broker experienced in truck and equipment financing.

Mehmi Financial Group works with over 30 lenders across Canada to get clients pre-approved in under 48 hours—with minimal paperwork.

• Start here: Apply Now / Calculator

Common Pitfalls to Avoid

1. Focusing only on interest rates: Consider amortization length, penalties, and flexibility.
2. Not knowing your cash flow: Don’t refinance into a larger payment you can’t sustain.
3. Skipping valuations: Equipment must be properly appraised if used as collateral.
4. Refinancing too often: Every refinance comes with costs—evaluate timing carefully.

Financing Solutions Available Through Mehmi Financial Group

We specialize in commercial truck and equipment refinancing for Canadian businesses. Whether you're in Brampton or Thunder Bay, our team helps you:

• Refinance trucks or equipment
• Access working capital or lines of credit
• Turn unpaid invoices into fast funding with Invoice Factoring

Industries We Serve:

• Transportation & logistics
• Construction
• Healthcare
• Food & hospitality
• Manufacturing
• Owner-operators and SMEs

Explore other guides:

• Refinancing Your Commercial Truck in Ontario
• Business Loans in Canada

FAQs About Refinancing Business Loans in Ontario

What credit score is needed to refinance a business loan?
Most lenders prefer a score of 650+, but Mehmi Financial Group can help even if your credit is lower.

Can I refinance if I have bad credit?
Yes, especially if you have strong assets (trucks/equipment) or stable cash flow. Speak with our advisors to explore your options.

What documents are needed to refinance?
Expect to provide financial statements, business registration, existing loan info, and equipment lists.

Is refinancing better than a line of credit?
It depends. If you want lower monthly payments, refinancing may be better. But if you need flexible, revolving cash flow, a line of credit is ideal.

How long does refinancing take?
With Mehmi Financial Group, you can get pre-approved within 48 hours.

Conclusion & Next Steps

Refinancing your business loan in Ontario can be a strategic move to strengthen your financial position. Whether you need to reduce payments, access working capital, or unlock cash from equipment, the key is choosing the right structure and partner.

At Mehmi Financial Group, we streamline the process—offering expert guidance, fast approvals, and access to 30+ lenders across Canada.

Ready to Refinance or Want to Explore Your Options?

Speak to a Financing Advisor
We’ll walk you through the process and help you unlock better terms—fast.

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