Key Takeaways:
- Loan Type: Caveat loan
- Loan Amount: $450,000
- Location: Paddington, Sydney
- Property Type: Commercial
- Property Value: $1.2 million
- Loan-to-Value Ratio (LVR): 37.5%
- Problem: Café owner facing insolvency due to rising costs, ATO debts, and plummeting customer traffic
- Solution: Fast $450,000 caveat loan from Secured Lending prevented business closure and provided vital working capital
The Hidden Toll Behind Sydney’s Hospitality Closures
In just ten years, hospitality business failures across NSW have soared by 222%. More than 800 restaurants and cafes entered external administration last financial year—up from just over 250 a decade ago. Behind each statistic is a struggling business owner, often blindsided by relentless cost increases and unpredictable trading conditions.
A telling example is the well-publicised closure of Paddington’s Zafferano Trattoria Mediterranea. The restaurant, despite its sterling reputation and loyal patronage, announced it would shut after four years. Not because of poor reviews or mismanagement—but because Sydney’s operating costs had become unsustainable. The heartbreaking message from owners Simone and Isobel Crivello went viral, echoing the plight of countless small business owners across the country.
A Café Owner’s Struggle: From Prosperity to Breaking Point
Just 10km west of the CBD, a popular café in Sydney’s Paddington was on the verge of joining that growing list of closures.
This café had been a local favourite for years, known for its breakfast rush and community events. But cracks started to form post-COVID. Over 12 months, the business faced:
- 40% rise in energy bills
- 15% increase in rent
- Ongoing staff shortages
- A $180,000 tax debt with the ATO
- Sharp drop in weekday foot traffic due to flexible working trends
The director was notified of a potential Director Penalty Notice (DPN) from the ATO—placing her personal finances at risk. Even with years of success behind her, she was now weeks away from insolvency. Unpaid suppliers, missed superannuation contributions, and sleepless nights had become her new normal.
“I honestly thought about handing the keys back,” she confided. “But it felt like giving up on years of hard work and the people we served.”
So, she sought urgent capital—not from the banks, who moved too slowly—but from Secured Lending.
How a $450,000 Caveat Loan Bought Her Time—and a Future
Secured Lending quickly stepped in with a commercial property-backed caveat loan.
- Loan Type: Caveat loan
- Loan Amount: $450,000
- Property Value: $1.2 million
- Security: Commercial property (owned under the business structure)
- LVR: 37.5%
- Approval Time: 3 hours
- Settlement Time: 48 hours
This facility was specifically structured to suit her cash flow cycle. No long applications. No red tape. Just a fast solution.
The $450,000 was used for:
- Clearing the $180,000 ATO debt, avoiding director personal liability
- Covering three months of operational overheads, including wages and supplier invoices
- Launching a promotional campaign that boosted bookings over weekends and holidays
- Hiring an experienced barista and chef, helping reduce the impact of labour shortages
With breathing room restored, the café turned the corner. Revenue stabilised, foot traffic improved, and the owner was able to confidently negotiate new supply terms and plan for the next seasonal upswing.
How Secured Lending Can Help Hospitality Owners Now
This isn’t a rare case. It’s playing out every week across NSW. Cafes, bakeries, bistros and bars—once thriving, now scraping to stay afloat—don’t always need millions. Often, they need access to fast, smart capital in the $100K–$500K range to buy time and reset.
Secured Lending specialises in exactly this:
We understand how critical timing is. That’s why we offer approvals in under 24 hours and settlements as quickly as 48 hours post-valuation.
If you’re wondering, “How can I stop my café from going under when banks won’t help me fast enough?”, the answer could be in your property.
