When a business or individual decides to refinance a credit obligation, they wish to make revisions in their interest rate, payment schedule or any other term in the contract. Refinancing can help save money in the long term, but if the money of the second loan is used to pay back the first lender, it won't be considered a business expense, and the interest paid for the first loan will not be tax-deductible. However, the interest paid back on the second loan will be tax-deductible.