What Is a Discharge Authority in Asset Finance Refi? (2026)
Discharge authority in asset finance refinance for Australian business owners | Switchboard Finance
🧾 paperwork explainer · payout → discharge → settlement ·
Business Owners Finance Hub · 2026
Most “refinance delays” aren’t about your business. They’re about paperwork timing. This guide explains the discharge authority step — where it sits, what it does, and how to stop deals going “pending”.
If you want the bigger picture first (is refinance even the right move?), start here: 11 Signs Your Business Is Ready for Asset Finance in 2025. Then use the 7-step walkthrough below.
1) What “discharge authority” actually means
In an asset refinance, the outgoing lender won’t release their security until they’ve been paid and the discharge is authorised. The discharge authority is the permission step that lets the old lender close the account and remove the claim over the asset.
If this step is unclear or incomplete, the consequence is simple: settlement can’t finish on time. Before anything else, make sure the numbers you’re working off are correct: What Is a Payout Figure? (it’s where most “rework” starts).
- Payout Figure is confirmed (what must be paid to close the old loan)
- Outgoing lender prepares the discharge step (authority + processing)
- New lender funds the payout and Settlement completes
2) The 7-step walkthrough (payout → settlement)
Think of refinance like a chain: if one link is missing, the whole thing waits. This is the clean sequence most lenders follow.
If you don’t follow a sequence, the consequence is “pending by confusion” — everyone is waiting for someone else. For a full end-to-end timeline view, pair this explainer with: Asset Finance Refinance Approval Timeline (2026).
| Step | What happens | What you provide | What “pending” usually means |
|---|---|---|---|
| 1 | Payout request is lodged with the outgoing lender. | Account details + asset identifiers (match invoice/rego/VIN if applicable). | Wrong account/asset details, or a missing reference. |
| 2 | Payout figure is issued (often with an expiry date). | Confirm the amount and date window with your broker/lender. | Payout expires or gets recalculated due to payments/fees. |
| 3 | Discharge authority is prepared and queued for processing. | Signed authority (where required) + correct entity/director details. | Signature/entity mismatch or missing signer. |
| 4 | New lender confirms funding conditions are met. | Clean supporting docs (bank statement trail + invoices). | Conditions still open (docs, invoice clarity, trading explanation). |
| 5 | Funds are transferred to payout the old lender. | Keep trading stable and avoid last-minute changes. | Transfer timing window missed or details need re-check. |
| 6 | Outgoing lender confirms receipt and processes closure. | Nothing new — just responsiveness if they ask for confirmation. | Processing queue delays at the outgoing lender. |
| 7 | Settlement completes and the refinance account is active. | Confirm repayment setup and post-settlement docs. | Settlement booked, but not yet completed/confirmed. |
3) The 6 mistakes that create “pending” loops
Most delays come from preventable mismatches: names, numbers, or invoices that don’t clearly describe the asset. If you remove these, refinance becomes boring (the goal).
If you ignore the mistakes, the consequence is repeat requests, re-issued payouts, and lost time — which is why “no-gap” planning exists: The No-Gap Refinance Bridge (2026).
- Payout figure not re-confirmed: fix by checking it right before funding is scheduled
- Entity name mismatch: fix by matching ABN/entity exactly across all forms
- Signer mismatch: fix by ensuring the correct director/authorised person signs
- Invoice too vague: fix by making asset description unmistakable (model/serial/rego/VIN where relevant)
- Dirty payment trail: fix by keeping deposits and payments easy to trace in bank lines
- Old lender queue time ignored: fix by planning for processing lag (don’t assume same-day)
4) The clean “refi proof pack” (what makes it fast)
Low doc refinances move faster when your story is obvious from the documents. You want the lender to understand the asset, the cashflow, and the payout chain without a phone call.
If you don’t build a pack, the consequence is more conditions and more back-and-forth. Start from the forced money page and work backwards: Low Doc Asset Finance.
- Bank Statements showing normal trading and clean debits/credits
- Payout letter / payout details from the outgoing lender
- Asset proof (invoice + identifiers like rego/VIN where relevant)
- Security check mindset (clean title/claims) — practical guide: PPSR Checks for Asset & Vehicle Finance (2025)
Discharge authority is the permission step that lets the outgoing lender close the loan and release security after the payout is received. If it’s incomplete or mismatched, settlement can’t complete — even if the new approval is done.
The consequence of getting this wrong is “pending loops”: re-issued payouts, signature/entity mismatches, and invoice clarity issues. Use the 7-step sequence, keep the payout current, and package a clean proof pack for faster outcomes.
FAQ
Yes. The outgoing lender needs the Payout Figure confirmed because it’s the exact amount required to close the account. If it expires or changes, you often need it re-issued.
It depends on the outgoing lender’s processing queue and whether the paperwork is clean. Most delays come from mismatches (entity/signer/invoice clarity), not from the refinance approval itself.
Because it’s “low doc” evidence of trading and cashflow stability. Clean bank statements reduce conditions and help settlement happen on schedule.
Keep the payout current, match entity and signer details exactly, and make invoices unmistakable. Most “pending” loops are paperwork loops.
It means the payout has been received and processed, the refinance account is active, and repayment setup is confirmed. That’s when operations can treat the refinance as done.
Disclaimer: This content is general information only and isn’t financial, legal, or tax advice.
