Key takeaways
- •A company's liquidation and a director's personal bankruptcy are separate processes, and each leaves a different record that a lender will find when it looks at your history.
- •A personal bankruptcy stays on your credit report for 5 years from the day it started or 2 years from the day it ended, whichever is later.
- •Unless you were made bankrupt yourself, your old company's liquidation does not clear your own debts or any of the company's debts you personally guaranteed. Those debts are still yours to pay.
- •A private loan from Secured Lending, backed by property, is assessed on the property, the equity within 70% of its value and how your company will repay the loan, which is why it can suit a company after a business failure.
- •When your company buys a commercial property with a private loan, the loan can cover up to 70% of the property's value. The rest of the price and the purchase costs come from your company's own funds or equity in another property.
- •Choosing a private loan term that runs past the date your bankruptcy leaves your credit report lets your company apply for a bank refinance to repay the private loan once that record has gone.
If your business failed and you now want to buy or refinance a commercial property, you do not have to wait years for a lender. A short-term private loan, secured by the commercial property your company is buying or refinancing, can fund the purchase or the refinance now, and your company repays it later from a bank refinance or a sale.
We would be glad to help your company with this. A private loan is a good fit after a business failure because we lend against the property, and we look at the equity within 70% of its value and at how your company will repay the loan. We lend our own funds, our in-house team values the property, and in most cases we decide within hours. Our bad credit business loans start from $250,000, with larger loans assessed case by case, and interest rates start from 9.7% p.a.
Before the loan itself, it helps to know exactly what a lender will find when it looks at your history, because the records are not all the same.
Three records, and how long each one lasts
A failed business can leave up to three separate records: your personal credit report, the public bankruptcy register and the old company's liquidation. Each follows its own rules.
Your personal credit report
A bankruptcy stays on your credit report for a fixed period. The Office of the Australian Information Commissioner sets it out as the later of two dates: "5 years starting on the day you became bankrupt, or 2 years starting on the day you were no longer bankrupt". A court judgment and a default listing each stay for 5 years.
Under the Australian Financial Security Authority's rules, a bankruptcy normally lasts 3 years and 1 day, and the trustee can lodge an objection that extends it for up to 8 years. For a bankruptcy of the normal length, the date 2 years after it ended is the later of the two, so that is the date it leaves your credit report.
The National Personal Insolvency Index
The National Personal Insolvency Index is a public register of bankruptcies and other personal insolvency proceedings, and anyone can search it. According to the Australian Financial Security Authority, many records stay on the index permanently. It is a different record from your credit report, and it is not removed after 2 years.
The same authority's list of employment restrictions during bankruptcy says a person who is still bankrupt cannot be involved in managing a company without the court's permission. Because we only ever lend to companies, this article is written for directors whose bankruptcy has ended, and for directors who were never bankrupt.
The old company's liquidation
A liquidation is a process for the company, not for you. The Australian Financial Security Authority's guide to personal bankruptcy and the liquidation of a company puts it this way: "If you do not become bankrupt, the company’s liquidation only resolves the company’s obligation to its creditors." Your own debts, and any company debts you personally guaranteed, are still yours to pay.
The same guide explains that the liquidator investigates whether there is a claim against the director, for example for allowing the company to trade while insolvent or for a breach of directors' duties. That is why the two practical questions about a liquidation are whether it has finished, and whether the liquidator has made a claim against you.
If you have been through a bankruptcy rather than a company liquidation, our article on caveat loans for post-bankruptcy funding covers another short-term option after a discharge.
Questions about the old business, answered up front
A short written account of what happened to the old business, with the documents behind it, saves time with any lender. It covers four things:
- •When the business failed, and whether it was a company liquidation, a bankruptcy or both.
- •Whether each process has finished, with the date the bankruptcy ended if there was one.
- •Whether anything is still open against you personally, such as a liquidator's claim or a demand under a personal guarantee.
- •What your company does now, and how it will repay the loan.
If the liquidator has written to you about whether a claim will be made, have that letter ready. We are a lender, not an insolvency practitioner or a solicitor, so questions about a liquidator's claim, a guarantee or your duties as a former director are for them.
How the loan works for a commercial purchase or refinance
Your company is the borrower, and the loan funds are paid to your company. The borrower can be an existing company, including a company acting as trustee. The loan is secured by a first or second mortgage over the commercial property your company is buying or refinancing, or over other residential, commercial or industrial property that your company or a director already owns.
| Detail | |
|---|---|
| Loan size | From $250,000, with larger loans assessed case by case |
| Maximum loan-to-value ratio | 70% of the property's value, including any existing loan on a second mortgage |
| Term | 1 to 24 months, most often 3 to 6 months |
| Interest rates | From 9.7% p.a. on a first mortgage, and from 11.95% p.a. on a second mortgage |
| Repayment | Through a defined exit agreed before settlement, such as a bank refinance or a property sale |
For a purchase, the 70% limit sets how much your company needs to contribute. As an illustration, on a commercial property bought for $1,500,000, the loan can be up to $1,050,000. The remaining $450,000, plus stamp duty and the other purchase costs, comes from your company's own funds or from equity in another property. A second property can be added as additional security, as long as the total borrowing stays within 70% of the combined value.
For a refinance, the loan pays out the existing lender at settlement, and the new mortgage is registered in first position. This suits an owner whose current facility is ending and whose bank will not renew it because of the old business. Our page on refinancing business loans explains how the payout works.
Timing the loan term against your credit report
Because a bankruptcy leaves your credit report on a known date, you can choose a loan term that runs past it. The bank refinance that repays our loan can then be applied for after the record has gone.
As an illustration: a bankruptcy that started on 1 March 2022 and lasted the normal 3 years and 1 day ended on 2 March 2025. Five years from the start and two years from the end both fall in March 2027, so that is when it leaves the credit report. A company borrowing in October 2026 could choose a 9 to 12 month term, which leaves several months after March 2027 for the bank refinance to be arranged and settled.
Check your own dates before you choose a term. A trustee's objection extends a bankruptcy, which moves the dates, and you can get a copy of your credit report from a credit reporting agency. If the plan is to repay from a sale instead, the term is set by how long the sale is likely to take.
How quickly the loan can settle
When a contract of sale has a fixed settlement date, speed matters. We lend our own funds, so no outside funder has to approve the loan. Our in-house valuation team assesses commercial and non-standard property without waiting on an external valuer. In most cases we decide within hours, we issue a letter of offer as soon as terms are agreed, and we can settle within 24 hours.
If your company has already signed a contract and the bank cannot meet the date, our page on urgent short term finance for a commercial property purchase covers that situation.
Frequently asked questions
Does my old company's liquidation make me bankrupt?
No. A company's liquidation and a director's bankruptcy are separate processes. If you were not made bankrupt, the liquidation deals only with the company's debts, and you remain responsible for your own debts and any company debts you guaranteed.
How long does a bankruptcy stay on my credit report?
A bankruptcy stays on your credit report for 5 years from the day it started or 2 years from the day it ended, whichever is later. For a bankruptcy of the normal 3 years and 1 day, that is usually 2 years after it ended.
Can the company I run now buy the property?
Yes. We lend to companies, including a company acting as trustee, so the company you run now can be the borrower. We do not lend to individuals.
Can my home back the loan for my company's purchase?
Yes. Your company is the borrower, and a director's home or investment property can be the security for the loan, alongside or instead of the property being bought, within the 70% maximum loan-to-value ratio.
How much does my company need to put in?
We lend up to 70% of the property's value, so the rest of the price and the purchase costs come from your company's own funds or from equity in another property.
How Secured Lending Can Help
We would be glad to help your company buy or refinance a commercial property after a business failure. Our loan is secured by the property, it can be in place quickly, and your company repays it through a defined exit, such as a bank refinance once the bankruptcy has left your credit report, or the sale of a property.
A private loan suits this situation because we look at the property, the equity and the repayment plan, and because we lend our own funds and value the property in-house. In most cases we can tell you within hours whether we can help.
We provide secured loans backed by real property. If you would like us to look at your company's purchase or refinance, it helps to have these to hand:
- •The property's address and price or estimated value, and any existing loan on it.
- •The contract of sale and the settlement date, if your company is buying.
- •A few lines on when the old business failed, and whether the liquidation or bankruptcy has finished.
- •How your company plans to repay the loan, and roughly when.
You are welcome to call us on 1300 795 175 to talk it through, or send the details through and we will come back to you.
