Page 40 - MAC4861_2 Finance class slides part 2
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BUSINESSES IN DIFFICULTY
Refinancing a business
• Refinancing refers to replacing the existing financing with
new financing.
• The new sources of funds are used to pay the existing debt
of the company.
• Refinancing could include, amongst others, increasing the
maximum amount of the facility, changing the forms of
finance used or obtaining finance from a different source.
• It is important to note that refinancing should only be
undertaken once a complete cost/benefit analysis of all
financing options available was undertaken.
• Under Sources and forms of finance you have already
learned about the various potential sources of funds, and
the role, characteristics, advantages and disadvantages of
each.
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