Refinancing
Replacing an existing loan with a new one, typically to secure better terms, a lower rate, or a different repayment structure.
Refinancing pays off the original loan’s remaining balance using proceeds from the new loan, and it’s commonly used when a business’s credit or financial position has improved since the original loan, or when market rates have dropped.
It’s also a common way to resolve a balloon payment or bridge loan coming due, moving the business into longer-term, more permanent financing before the shorter-term loan matures.
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