Page 12 - PowerPoint Presentation

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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