7 Refinance Traps That Blow Up Your Deal (2025)
Seven refinance traps checklist for asset loans: payout figure, exit fees, LVR shock, term reset and PPSR issues
⚠️ Refinance Mistakes · Asset Loans · Business Owners Hub · 2025
Refinance can lower pressure — or accidentally make it worse. Most “blown up” deals come down to missing numbers, bad timing, or choosing structure based on hope.
If you’re fixing the whole system (not just one loan), start here: Business Cashflow System. If the goal is clean asset funding, anchor to the money page: Low Doc Asset Finance.
Fast scan: the 7 traps (and the fix)
If you want speed, you need one clean purpose, one clean number set, and one clean path to settlement. The table below is designed to be a “checklist you can action this week.”
| # | Trap | What it causes | What to do | Do this week |
|---|---|---|---|---|
| 1 | Not confirming the payout figure | Late recalcs, sudden shortfall, delays | Lock exact payout + expiry date | Request payout statement + fees in writing |
| 2 | Ignoring exit fees / break costs | “Savings” disappear | Run net savings, not headline rate | List all closure/admin fees |
| 3 | LVR shock from a new valuation | Higher pricing or decline | Assume conservative value first | Compare current balance vs realistic value bands |
| 4 | “Resetting the clock” with a long term | Lower weeklies but bigger lifetime cost | Match term to asset life | Write 3 options: short / medium / long |
| 5 | PPSR / security mess | Settlement stalls | Check security early | Run a PPSR check early |
| 6 | Mixing “ops cashflow” into the asset request | Permanent balance risk | Split lanes (asset vs business) | Compare to Business Line of Credit |
| 7 | Multiple enquiries + messy story | Slower decisions, more conditions | One broker, one narrative | Pause “shopping” and package it properly |
1) Trap: You don’t confirm the payout figure (with an expiry)
A refinance lives or dies on the payout figure — because it dictates exactly what has to be cleared at settlement. If it’s wrong, everything downstream becomes rework.
The killer is timing: payout statements usually have an expiry window, and daily interest keeps moving. Get it early, then build the deal around what’s true.
- Request the payout statement in writing, including expiry date.
- Ask for the exact “good for settlement until” date.
- Confirm where the payout must be sent to.
2) Trap: Exit fees (and “small” admin fees) erase your savings
Some exits are clean, some aren’t — and you won’t know until you list every cost. The “headline rate” is not the outcome.
The right test is net benefit after all fees. If the savings are thin, it may be smarter to restructure rather than refinance.
- Confirm any break costs and closure fees.
- List discharge, admin, valuation, and documentation fees.
- Calculate the “break-even months” (how long until you’re actually ahead).
3) Trap: LVR shock after a new valuation
Refinance often triggers a fresh look at value. If the market has softened or the asset is older than you think, the numbers shift fast.
Don’t build your plan on optimistic resale value. Assume conservative value first and treat anything higher as upside.
- Compare current balance to realistic value (not “best case”).
- Identify if you’d be asked for a lower amount or different structure.
- Check if a shorter term beats forcing a marginal deal.
4) Trap: “Resetting the clock” with a long term
Extending the term can drop repayments, which feels like relief. But it can also increase total cost and keep you paying long after the asset’s peak usefulness.
The safest decision matches the term to asset life and your revenue cycle. If you just need breathing room, a restructure or a cashflow lane can be cleaner.
- Price 3 scenarios: short / medium / long.
- Write the purpose in one sentence (lower cost vs lower weekly).
- Pick the option you can live with in “quiet months”.
5) Trap: PPSR/security issues stall settlement
Security admin is boring — and it’s exactly where “easy deals” stall. If a registration or release is messy, everything slows down.
You don’t want to discover this at the finish line. Check early so settlement is clean. (If you want the official register info, start at ppsr.gov.au.)
- Confirm the current financier can release security quickly.
- Ensure paperwork is consistent (names/ABN details).
- Don’t leave “security clean-up” to the last 48 hours.
6) Trap: You mix operations cashflow into the asset refinance
This is the silent killer: you refinance “the loan” but the real problem is the business cash cycle. The asset lane is not designed to fund ongoing ops gaps.
If the real pressure is wages, suppliers, tax, or timing, split the lanes. Keep the asset clean, and use a business cashflow product for business cashflow.
- Write: “Asset funding” vs “Ops funding” as two separate lines.
- Compare to a revolving buffer like Business Line of Credit.
- Stop using top-ups as a permanent cashflow patch.
7) Trap: You “shop around” and make your story messy
Multiple brokers, multiple quotes, multiple narratives = slower outcomes. Even if you’re trying to be smart, it can look unstable.
If you want speed, you want one clean package and one clean story. The application should match the evidence and the purpose.
- Stop “enquiry stacking” and package the deal properly.
- Keep the purpose and exit simple and believable.
- Explain the hard weeks (don’t hide them) — in one clean narrative.
Most refinance blow-ups are avoidable: confirm the payout figure, price the deal after fees, assume conservative valuation, and don’t “reset the clock” just for lower weeklies. Keep asset funding clean — and don’t force ops cashflow into an asset lane.
Next steps: start at the hub (Business Owners Hub), then compare your cashflow lanes: Business Line of Credit · Working Capital Loans · Invoice Finance.
FAQ
In a refinance, the payout figure is the exact amount that must be cleared at settlement — and it often has an expiry window. If it changes late, you can end up short or delayed.
Exit fees (plus “small” admin costs) can erase weekly savings. The right test is net benefit after all costs — not the headline rate.
It’s when a new valuation changes your LVR and the lender’s view of risk. That can change pricing, deposit requirements, or whether the refinance is viable at all.
Not always — but longer terms can increase lifetime cost and keep you paying after the asset’s best years. Matching term length to asset life and cash cycle is usually safer.
Because security needs to be correctly registered and released for the refinance to complete cleanly. A PPSR check early helps avoid discovering issues at the finish line.
