On 12 August 2025, the Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 3.60% – its third cut this year. Markets are predicting another two rate cuts by early 2026, with the next likely in November.
Commercial banks have started to pass these reductions through, but the real opportunity for business owners isn’t simply cheaper debt. It’s the chance to use a lower-rate environment to reshape funding strategies, strengthen resilience and position businesses for growth.
Beyond lower cost: why refinancing matters now
Lower rates provide tailwinds, but the businesses that create real value go further than just trimming basis points.
- Enhancing lender competition – in a falling rate environment, lenders are under pressure to deploy capital. Businesses that run a structured refinancing process can capture not only pricing but also better terms, headroom and flexibility.
- Releasing capacity for growth – freeing cash flow today allows businesses to invest in innovation, talent and acquisitions tomorrow.
- Creating balance sheet resilience – locking in term funding now protects against future volatility in both interest rates and credit availability.
- Supporting valuation and succession – lower debt service improves reported profitability and cash flow, both of which directly impact business valuations for owners considering succession or exit.
- Building optionality – a well-structured facility mix (term loans, revolvers, trade finance) gives management the agility to pursue opportunities without being constrained by legacy structures.
Case study: using the cycle to reset
We recently advised a mid-sized manufacturing business carrying a patchwork of term loans, overdrafts and supplier finance, established when rates were higher. Rising costs and restrictive covenants were constraining growth.
Our approach:
- Reviewed facilities to identify cost, covenant and tenor improvements.
- Ran a competitive process with banks and non-bank lenders to introduce genuine choice.
- Restructured the mix to balance day-to-day working capital with longer-term investment capacity.
The outcome:
- Average interest rate reduced by over 100bps.
- Liquidity released to fund equipment upgrades.
- A stronger balance sheet with greater flexibility to withstand volatility.
The key takeaway is that refinancing is not just a “defensive” exercise. Done strategically, it resets the funding platform to support growth, resilience and value creation.
What we’re seeing in the market
Across sectors, proactive businesses are:
- Diversifying lender relationships to reduce reliance on a single bank.
- Extending maturities to lock in certainty through the rate cycle.
- Embedding flexibility into covenants to allow for growth or M&A.
- Exploring alternative lenders (working capital lenders, private credit, non-bank institutions) who are often more flexible on structure and speed.
These are the kinds of moves that separate businesses that benefit from a rate cycle from those that capitalise on it.
How we help
Our Corporate Finance team helps mid-sized businesses translate falling rates into lasting advantages through:
- Debt advisory & structuring – aligning debt with strategy and risk appetite.
- Refinancing & repricing negotiations – leading lender discussions to capture pricing, terms and flexibility.
- Capital raising & arranging – securing new facilities from banks and alternative lenders for growth, acquisitions, or capital projects.
- Working capital optimisation – tailoring revolving lines, invoice finance and trade facilities for day-to-day agility.
- Independent lender engagement – managing a competitive process so management stays focused on running the business.
Our role is to help your business navigate the optimisation of your capital structure – from strategy through to execution – so you can focus on running your business while your funding is working for you in the background.
Take advantage of this window
Lower rates are a catalyst, but the real question is whether your current funding structure positions you for growth, resilience and optionality.
Our team can review your debt portfolio, benchmark it against current market conditions and run a refinancing process that puts you on the front foot.
Contact your local William Buck advisor for a no-obligation refinancing health check – and see how smarter capital management can work harder for your business.
