Ask for settlement figures on a specific date
A balance on the latest accounts may differ from the cash required to release a facility. Ask the existing lender for a dated settlement statement, including accrued interest, break costs and release costs. For several facilities, list them separately with their security, maturity and any cross-default or consent conditions.
Suppose a company owes £900,000 plus £18,000 of exit costs. A replacement facility of £950,000 carries a fee of 1% deducted at drawdown. It delivers £940,500 in cash. After settlement of £918,000, £22,500 is left before legal costs. Calling the £50,000 increase in face amount “new cash” would overstate the benefit.
Compare the next payment and the last
A longer term can reduce monthly debt service while increasing total interest. A bullet structure can release monthly cash at the expense of a larger maturity obligation. Draw a line for the highest monthly payment under each proposal and identify exactly how the principal will be repaid.
Use the comparison tool to test two new structures on a consistent basis. Add settlement and release costs to your sources and uses separately if they relate to the old debt. The same expense should appear only once.
Plan the handover
Record who issues settlement figures, who controls the funds and when security is released and re-registered. Leave time for external legal work and consents. In the funding brief, identify any deadline the old lender has imposed and attach a named owner to each outstanding document in your own records.