Key takeaways
- •A company can borrow after a small business restructuring, and the first thing a lender asks is whether the restructuring plan has been fulfilled, meaning the company has met all its obligations under the plan and every admissible debt has been dealt with under it.
- •The Australian Securities and Investments Commission's company register shows your company as registered again from the day creditors accept the plan, not the day the plan is finished, so the register alone cannot show whether it is fulfilled.
- •If a restructuring plan terminates before it is fulfilled, for example because a breach is not fixed within 30 business days, the unpaid debts it covered fall due on the next business day.
- •A restructuring plan binds a bank holding a mortgage only in limited cases, so the bank loan can continue on its existing terms, and refinancing it can be your company's first finance need afterwards.
- •If the Australian Taxation Office (ATO) was a creditor, the cash-flow forecasts and changes to management it asked for before voting on your plan answer a lender's question about what has changed since the restructuring.
- •A private loan from Secured Lending, from $250,000 on a first or second mortgage over property, is decided in hours and can settle within 24 hours once terms are agreed.
Yes, your company can get a loan after a small business restructuring. If your company has come through a plan and now needs funds, we would be glad to help. A short-term private loan backed by real property is a good fit at this stage, because a bank may still be wary of a company that has recently been in external administration, and we lend against the property. We look at the property, the loan-to-value ratio, how the loan will be repaid and where the restructuring plan stands. We lend our own funds, decide in hours and can settle within 24 hours once terms are agreed.
Most plans do finish. In the Australian Securities and Investments Commission's review of the small business restructuring process (Report 810), which covered restructurings that began between 1 July 2022 and 31 December 2024, 92% of the 1,260 finalised plans were fulfilled. What a lender needs is the evidence that your plan is one of them, or how close it is.
Accepted is not the same as fulfilled
When a restructuring practitioner is appointed, the Australian Securities and Investments Commission changes the company's status on its public register from registered to external administration. Under the Commission's guide to small business restructuring, the status changes back to registered when creditors accept the restructuring plan, and from then on the company no longer has to add any words after its name.
A plan cannot provide for payments on admissible debts more than three years after the day it is accepted, so a company can show as registered for up to three years while plan payments are still being made. A plan ends in one of two ways, with opposite results:
- •Fulfilled. When the company's obligations under the plan have been met and every admissible debt has been dealt with under it, the company is released from those debts.
- •Terminated any other way. If the plan ends for any other reason, every admissible debt or claim "that has not been dealt with in accordance with the plan is taken to be due and payable on the business day after the day on which the termination occurs." A plan terminates if a breach is not fixed within 30 business days, if a court terminates it, or on the day a voluntary administrator, liquidator or provisional liquidator is appointed.
This is why the plan's status is the first thing a lender asks about. A register search cannot answer it.
What a lender checks after a plan, and what each document proves
These are the points we ask about after a small business restructuring, and where the evidence comes from.
| What we ask about | What it shows | Where it comes from |
|---|---|---|
| The restructuring plan and where it stands | Whether the plan is fulfilled, and if not, the payments and time left | The plan itself, and the restructuring practitioner for the plan |
| The ATO account since the plan began | Whether lodgements and payments after the plan started are up to date | The ATO statement of account and your accountant |
| Secured debt that sat outside the plan | The lender, the balance, the payout figure and whether the loan is in arrears or under review | A statement and payout letter from that lender |
| What changed in the business | Why the company is in a better position now than before the restructuring | The cash-flow forecasts and management changes prepared for the plan |
| The directors' own position | Whether a director penalty or a personal guarantee is still outstanding | The director penalty notice, if any, and the guarantee documents |
| The public record | That the company was in external administration and is now registered | The Australian Securities and Investments Commission's company register |
The ATO account after the plan. The ATO's guidance on small business restructuring is direct about tax that falls due after the plan starts: "If the company fails to comply with its obligations after the plan has started, we may take stronger enforcement action. This may occur even if the company is otherwise meeting its obligations under the restructuring plan." A new business activity statement balance after the plan is therefore the first thing we look for on the ATO statement. In the Commission's review, the ATO was a creditor for at least 93% of the companies that fulfilled a plan.
Refunds you were expecting. The same ATO page explains that any credit for a period before the restructuring is applied to the debts from before the restructuring, even after the plan releases them. A refund the company expected for an earlier period may never be paid out. A cash-flow forecast given to a lender should leave the earlier refunds out.
The directors. A small business restructuring does not remit a director penalty that was not remitted within the 21 days of the notice, and the pause on creditors acting against personal guarantees ends once the plan is entered into.
The bank loan that sat outside the plan
A plan binds a secured creditor only to the extent its debt is more than the value of its security, or to the extent it agrees to be bound, and it does not stop a secured creditor enforcing its security unless that creditor accepted a plan preventing it or a court orders otherwise. Where the property is worth more than the bank's debt and the bank did not agree to be bound, the plan leaves the bank's mortgage over the company's premises on its existing terms.
That can be where the first finance need after a small business restructuring comes from. A bank that knows the company has been in external administration may review the facility, decline to extend it, or ask for evidence that the restructuring is complete. A short-term first mortgage can refinance the business loan and pay out the bank in full, so the company has one lender and a set term while it builds the trading record a bank will later want to see.
How a private loan works after a restructure
The company is the borrower, and the loan funds are paid to the company. A loan after a small business restructuring can refinance the secured loan that sat outside the plan, pay an ATO balance that built up after the plan started, buy stock, or buy or refit premises. Where the loan pays a post-plan ATO balance, the company then pays the ATO in full itself, and our tax debt loans page covers that use in more detail.
| Loan size | From $250,000, with larger loans assessed case by case |
| Interest rate | From 9.7% p.a., from 11.95% p.a. on a second mortgage |
| Term | 1 to 24 months, typically 3 to 6 months |
| Security | A first or second registered mortgage over residential, commercial or industrial property, such as the company's premises, a director's home or an investment property, including property already held in a company or a trust |
| Maximum loan-to-value ratio | 70%. For a second mortgage, the first and second mortgages combined. A second property can be added as additional security within the same 70% |
| Repayment | The company repays the loan to us through a defined exit strategy, for example a refinance to a bank once the company has a trading record after the plan, or the sale of a property |
Companies that use a small business restructuring are small by definition, and the Commission found that the median admissible unsecured claims in finalised plans were $359,082. Our loans start at $250,000, and one loan can cover more than one need, such as refinancing the bank loan and paying a post-plan ATO balance together.
Our debt restructuring loans page explains how we fund the contribution a plan requires, or clear secured debt that sits outside it.
Why a lender asks what changed
Under the Commission's eligibility rules, a company cannot use the small business restructuring process again within seven years, and the same bar applies, with limited exemptions, where a director was a director of another company in restructuring or simplified liquidation in that period. A second restructuring is not available if the business falls behind again, so a lender asks what is different now.
Before it would consider a plan, the ATO required supporting information that included cash-flow forecasts with their key assumptions and documented changes to management and operations aimed at improving financial performance. The ATO's most common reasons for rejecting a plan include poor tax compliance history and director or related entity loan accounts that have not been repaid. If the ATO was a creditor, the company prepared that information for its vote, and the same documents answer a lender.
We are a lender, not a restructuring practitioner. The practitioner for your plan can confirm its status and what the plan allows, your accountant handles the ATO account, lodgements and any director penalty, and your solicitor advises on any personal guarantee.
Case study: a $300,000 second mortgage to support a small business restructuring plan
A business that had been profitable, with a strong client base and consistent revenue, came under pressure after a change of management. The new general manager had not kept up with the firm's financial obligations, and a tax bill and unpaid trade creditors built up. Banks were unwilling to extend new credit while the tax debt was unsettled.
After reviewing the business's financials and its restructuring plan, we provided a $300,000 second mortgage secured against an investment property owned by the director. We approved and released the funds within days.
The loan had two purposes: to pay off a significant portion of the tax debt so the small business restructuring plan could proceed, and to recapitalise the business so it could meet urgent obligations and keep operating while the restructuring took effect.
Frequently asked questions
The register says the company is registered. Why does the lender still ask about the restructuring?
The register changes back to registered when creditors accept the plan, not when the plan is fulfilled. Plan payments can run for up to three years after acceptance, so the register alone does not show whether the plan is finished.
Our plan still has payments left. Can we borrow now?
We need to learn your scenario further. Tell us the plan's terms, the payments made and the payments left, and the property that could back the loan. If a plan terminates before it is fulfilled, the debts it covered fall due again, so the plan's status is part of every assessment.
Will the restructuring show on the company's records?
Yes. The Australian Securities and Investments Commission notes the appointment of a restructuring practitioner on its company register, and that information is publicly available. How a commercial credit reporting bureau records it, and for how long, is a question for that bureau.
How long until a bank will lend to us again?
That is for each bank to say. You do not need a bank's approval to borrow from us: we assess the property, the loan-to-value ratio and how the loan will be repaid, and we can decide in hours.
Can I borrow against property after a small business restructuring?
Yes. We lend on a first or second mortgage over residential, commercial or industrial property owned by the company or a director, up to a 70% loan-to-value ratio, to a company that has been through a small business restructuring.
How Secured Lending Can Help
We would be glad to help your company take its next step after the plan. Our loan gives your company funds now, whether that is to refinance the bank loan that sat outside the plan, pay a post-plan ATO balance in full, or fund stock or premises. The loan funds are paid to your company, and your company repays us through a defined exit, such as a refinance with a bank once it has a trading record after the plan, or the sale of a property.
A private loan suits this stage because it is quick and because we lend against the property, so you do not need a bank's approval to borrow from us. We lend our own funds, our in-house team values the property, and we can settle within 24 hours once terms are agreed. A live ATO tax debt listing is not, on its own, a reason we decline.
We provide secured loans backed by real property. If you would like us to look at your situation, it helps to have these to hand:
- •The restructuring plan, and the practitioner's confirmation of where it stands.
- •Your company's ATO statement of account and its lodgement status since the plan began.
- •A statement and payout figure from any lender with a mortgage that sat outside the plan.
- •The property that could back the loan, who owns it, its estimated value and any loan already on it.
- •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. In most cases, we can tell you within hours whether we can help.
