How to refinance business debt, at £3m to £15m.
Refinancing business debt means replacing an existing facility with a new one, usually before it matures, and at £3m to £15m it is run as a competitive corporate process rather than bought as a product off a panel. Most of what the web says about how to refinance a business loan is written for sub-£3m broker lending, where the answer is a form and a shortlist. A facility at this size is a different exercise. You assess what you already have, prepare the credit to the standard a committee expects, take it to the whole market, negotiate the structure, and close it cleanly. Started early, that process reprices the debt from strength; started late, it becomes a scramble to refinance because the clock ran out. This guide is the how, pitched at that ticket band, and it is the difference between an advised process and a broker product.
Written for the borrower’s side of the table. This is general guidance, not advice on your specific facility. It is the process hub for the shorter answers in our working guide.
Replacing one facility with another, for one of five reasons.
To refinance is to repay an existing facility out of a new one. The old debt is discharged, the old security released, and a new agreement, often with a new lender, takes its place. For a trading company at this size the facility being refinanced is usually a term loan, a revolving credit line, or a package of both written on customary three-to-five-year terms, and the refinancing settles the whole package at once.
Companies refinance for five common reasons, and most refinancings have more than one in play. The commonest is a maturity approaching: the facility falls due and has to be replaced, because there is no automatic renewal. Covenant pressure is the second: a business running close to its leverage or cover tests refinances into a structure with more room, or resets the covenants before a breach forces the conversation. Growth or an acquisition is the third: the existing facility is too small for the plan, and the refinancing sizes the debt up to fund it. Repricing is the fourth: as rates fall, or as the business de-risks, the margin agreed at signing no longer reflects the credit, and a refinancing captures the improvement. The fifth is structural: releasing a charge over an asset the company wants to sell, or getting a personal guarantee off a director as the business grows into standing on its own balance sheet.
The trigger shapes everything downstream: the lenders worth approaching, the structure to ask for, and the story the credit paper has to tell. A maturity-driven refinancing and an acquisition-driven one are run differently even for the same company. The first job of the process is to be honest about which of the five is really driving it.
Begin twelve to eighteen months before the facility matures.
The convention is to start twelve to eighteen months before maturity, and the reason is leverage, not paperwork. A properly run competitive process takes twelve to sixteen weeks from mandate to money, but the value sits in the margin either side of it: time to prepare the credit properly, time to run more than one lender in parallel, and time to walk away from a mediocre offer and still make the date. A borrower who starts with a year and a half in hand negotiates from strength. A borrower six weeks from maturity negotiates from necessity, and every lender in the room can price the difference.
Timing has its own guide. Our guide to when to start a refinancing sets out the week-by-week shape, what proximity to maturity costs, and when an extend-and-amend beats a full process. The short version for this hub: fix the maturity date, count back the process and a buffer for slippage, and the mandate wants to be live twelve to eighteen months out. The rest of this page is the how, not the when.
Assess, prepare, run the market, structure, close.
A refinancing at this size runs in five steps. They are the same steps a corporate finance adviser runs on a larger deal, scaled to a lower-mid-market facility. The discipline is what turns a quiet renewal into a competitive process, and it is exactly the part a form-and-panel route skips.
Step one · Assess
Read the existing agreements before you approach anyone, and fix what you can. That means the things a new lender will find: a satisfied charge still showing on the register, a covenant set too tight, a personal guarantee to negotiate off, and the cost of leaving the current facility. It also means sizing the ask against what the numbers will actually carry, roughly 2.5x to 3.5x EBITDA on bank senior and 4x to 4.5x with a unitranche or a junior layer, rather than what you would like, as our guide to how much your business can borrow sets out.
Step two · Prepare
Build the pack the process will demand before anyone asks for it: three years of filed accounts, current management information, an integrated forecast that services the debt through a downside case, the covenant calculations that go with it, and an information memorandum that frames the ask. Prepared to committee standard, this is the price of admission with every lender category, and it is where lower-mid-market borrowers most often under-invest. A credit paper that answers the questions before they are asked is what lets the rest of the process run to time.
Step three · Run the market
Take the credit to the relevant lender categories in parallel, not one at a time: other clearing and challenger banks, asset-based lenders where the balance sheet carries security to lend against, and debt funds where the leverage or the story runs past bank appetite. The incumbent’s renewal runs inside this process, not ahead of it. Running the whole market is the point of the ticket band. At £3m to £15m the full spread of lenders is reachable, where a sub-£3m broker product is not, and competitive tension is the only thing that disciplines margin, fees, leverage and covenants.
Step four · Structure
Compare firm term sheets on structure, not just the headline margin. Leverage, tenor, the amortisation profile, covenant headroom of customarily 25% to 30%, call protection, hedging and the full fee stack all move the true cost, and a keen margin can hide a dear deal. This is where the term sheet gets negotiated, and where a live alternative in the room is worth more than any argument.
Step five · Close and move security
Legals and conditions precedent take the deal to completion, and then the mechanical part unique to a refinancing runs: repay the outgoing facility on the day, get the old charges released and the new ones registered, and move any hedging across, so a committed line never falls into a gap between agreements. Handled to a timetable, the switch is invisible to the business; handled late, it is where a maturity turns into a scramble.
The five steps generalise. The value is created early, in the assessment and the credit paper, and late, in the negotiation and the close. The middle is process discipline. Skip the first two steps and the market prices the gaps back to you.
Same process, plus an incumbent to manage and a facility to exit.
A first-time raise starts from a clean sheet. A refinancing carries two things a new raise does not: an incumbent lender with a relationship and a view, and an existing facility that has to be exited cleanly. The incumbent is both the easiest renewal and the reason discipline slips. A renewal letter three to six months out feels like the start of the process, but treating it that way hands the clock to the other side of the table. Run the incumbent inside the competitive process, not ahead of it, and its offer improves for the same reason every other lender’s does.
The exit is the other difference. The outgoing facility sets the cost and timing of leaving, and that is fixed by the terms you signed last time. On most bank term loans you can prepay at par, and a revolving credit facility repays freely within its term, so the exit is close to costless. Fund debt is different: it often carries call protection in the early years, a non-call period then a premium that steps down, and a swap you fixed with may carry a break cost on unwinding. Check the exit before you time the entry.
Refinancing also has an advantage a new raise lacks: a track record with the debt. You have serviced a facility, produced covenant certificates and the numbers show it, and a performing credit is evidence a first-time borrower cannot present. Used well, that history prices.
The price of the new facility, plus the cost of leaving the old one.
Both the new facility and the old one are floating-rate, priced over SONIA, which sat at 3.73% on 2 July 2026 against a Bank Rate of 3.75%, held at the Bank of England’s June meeting. Bank of England, Bank Rate. On a secured, sensibly geared deal a bank margin is a low single-digit spread over that reference. As an illustration at August 2026 rates, a bank all-in near 6.75% is a 3% margin over the reference rate. A commitment fee of around 35% of the margin runs on any undrawn revolver, and an arrangement fee nearer 1% is charged on the new facility at close.
The one-off cost of refinancing specifically is the second half of the answer, and it is the half a repricing borrower must set against the saving: the arrangement fee, legal fees on both sides, valuation and diligence costs, any break cost or exit fee on the outgoing facility, and adviser fees. Fee by fee, the full stack is set out in our guide to the all-in cost of raising debt. These figures are illustrative arithmetic, not a quote.
A pure repricing only pays if the margin saving clears the one-off cost and any call protection on the debt you are leaving. Most refinancings are not pure repricings. They are driven by a maturity, a covenant or a growth plan, where the cost is simply the price of continuing to trade with committed debt, and the question is not whether to refinance but how well.
Start now, and start with the dates, because you are not alone on the wall.
Start now. A 2026 maturity sits in the busiest stretch of the UK refinancing wall: more than 14,500 lower-mid-market companies are inside an estimated refinancing window at once, and the crowd does not thin until after mid-2027, so there is no quieter market to wait for, as our guide to the UK refinancing wall counts it. Pull your facility agreement and confirm the contractual maturity, any extension options and the notice periods they carry; then check what the market can see about you, which is the charge on your Companies House file and its creation date.
If the facility being refinanced is a Covid-era scheme loan, it has its own route. The Coronavirus Business Interruption Loan Scheme was written on terms of up to six years, so the last CBILS facilities mature by early 2027, with the Recovery Loan Scheme cohort a year or two behind, and the successor Growth Guarantee Scheme can be used to refinance them, treated as a new application subject to the lender’s criteria. Our guide to refinancing a CBILS or Recovery Loan Scheme facility sets that route out.
The sequence is the part borrowers get wrong. Going to the incumbent first, waiting for its answer and only then looking wider hands the clock to the other side. Build the pack, open the market and run the renewal conversation together, and let each inform the other. On a wall where every desk is triaging, the file that arrives complete with a live alternative behind it is the one that gets priced with care.
We will run the process, or tell you if you do not need one.
If a facility on your book matures inside the next eighteen months, a first conversation is confidential and costs nothing. We read the existing facilities, size the raise against the numbers, prepare the credit and run the whole market, and tell you plainly whether to refinance now, extend, or wait. See how a mandate runs in how we work, or the full range of what we advise on in our services.