Debt Restructuring Loans for Businesses Under Pressure

It can, where both payout figures together fit inside 70% of the combined value of the two properties. One loan from us, secured over both, repays the lender that appointed the receiver and the bank at the same settlement, and leaves your business with one lender, one rate and one repayment date. Ask the appointing lender for a written payout figure that includes the receiver's costs to the settlement date, and ask the bank for its figure to the same date. We do not give insolvency advice, so what the repayment means for the receiver's appointment is a question for insolvency specialists, and we can connect you with insolvency specialists in our network.

• →Refinancing a lender that has appointed a receiver

The one that can do the most damage soonest, which is rarely the loudest. A mortgage in default can lead to possession proceedings, and a director penalty notice makes each director personally liable unless one of the steps on the notice is taken within 21 days. A supplier threatening a statutory demand has not yet served one. Where a mortgage is already in default, we need to learn your scenario further before we can say what a loan can clear. Send us the default notice, the director penalty notice and the supplier's letter with the property details, so we can look at the equity and the order with you.

Yes. A restructure has a fixed amount of equity behind it, and spending it first on the debts that carry enforcement risk is the reason for setting an order. Trade creditors usually come last, because a supplier has to go through the courts to collect, while the ATO can issue a garnishee or a director penalty notice without one. The debts left out need a plan of their own, such as a payment arrangement agreed in writing. Bring the payout figures and the ATO balance to the first call so we can show you how far the equity goes.

We need to learn your scenario further, because that loan has passed its term. We would look at the equity in the factory property inside 70% of its value, the lender's payout figure and how a new loan would be repaid. Where a loan goes ahead, the payout and the withdrawal of the caveat happen at the same settlement, so our mortgage can be registered. Ask for the payout figure in writing now. Where the term has expired and a default margin is running, the figure keeps rising until it is paid.

• →$3 million to pay out a private lender

It can, where the loan is at least $250,000. Clearing a judgment debt before it supports a winding-up application is one of the restructures we fund, and the loan funds are paid to the company, which pays the judgment creditor itself. On its own, $85,000 is below our $250,000 minimum, so the loan would need to cover other business debts or purposes as well to reach $250,000. If an application has already been filed, tell us on the first call and have your solicitor confirm what has to be paid.

• →what a judgment debt means for your business

No. Where the property has the equity, the restructure can pay out the bank as well and leave a single first mortgage with us, inside 70% of the property value. Ask the bank for its payout figure at the same time as the other lenders, because the total of all the payouts decides whether that structure fits.

We need to learn your scenario further, because the private lender's term has expired. On those figures, 70% of $3 million is $2.1 million, and the three debts total $2.05 million, which leaves about $50,000 of room. That room is thin. The private lender's payout figure will include accrued interest and a default margin on top of the $650,000, so get it in writing this week. If it pushes the total past $2.1 million, a second property can be added as security.

We need to learn your scenario further. Ask the mortgagee for its payout figure in writing now, including its enforcement costs, and send it to us with the property details, because that figure and the equity inside 70% of the property value are what we look at first. Call us this week rather than in week four, so there is time for a valuation if a loan can go ahead.

• →loans to stop a mortgagee sale

It can. Get each agreement in writing, with the amount accepted and the date it has to be paid, so the loan can be sized on the agreed amounts rather than the full invoices. The loan funds are paid to the business, which pays each creditor itself. If the ATO is also owed, tell us, because the ATO debt is usually dealt with before trade creditors.

Yes. Both units can secure the loan, with the 70% limit applied to each, and the sale of one of them is a defined exit, provided the sale proceeds cover the loan. Ask your agent for a realistic sale timeframe, and we will set the term to run past it. Terms run from 1 to 24 months.

Yes. Clearing two private facilities held over the same title is one of the restructures we fund. Both lenders provide payout figures, both are paid out at one settlement, and we hold a single first mortgage inside 70% of the property value. Request both payout figures now. If either term has already expired, its figure will include a default margin.

Consolidation is a cost exercise. Several facilities at several rates are replaced by one property-secured loan, and the point of it is a lower blended cost and a single repayment. Restructuring is a deadline exercise. Something has forced the issue, usually a payout figure, a default notice or ATO recovery action, and the debts have to be cleared in a particular order before the position gets worse. The facility can look similar on paper. The assessment and the urgency do not.

Yes, and it is the most common single use of this facility. We request the payout figure in writing, confirm what is registered on the title, and clear that lender at settlement. Where their term has expired and a default margin is running, the figure will be higher than the principal you remember, which is why it is worth requesting early. Settlement within 24 hours is achievable on a qualifying file.

The second mortgagee provides a payout figure and a discharge authority. At settlement the funds are sent and the discharge is lodged with the titles office, which removes the charge from the title. In a restructure we either take that second position ourselves and leave your first mortgage untouched, or clear the first and the second together and hold one first mortgage. Which of the two depends on how much equity there is and whether the existing first is worth keeping.

Yes. Arrears and a default notice are the reason most restructures happen, not a reason we decline them. What matters is how far the process has run. Before enforcement there are usually several options open. Once a receiver is appointed or possession proceedings have started, the window narrows and consent may be needed from parties who were not previously involved. Tell us where the process actually sits in the first conversation.

Not on an asset-backed file. We assess the equity in the security property, the total being cleared, and what repays us at the end of the term. Where those three hold up we can proceed without full financial statements or tax returns. What we do need is accuracy: an understated debt position is the one thing that reliably stops a restructure at settlement.

It depends on timing. A secured lender that has issued a default notice may hold off where a refinance is approved and has a settlement date, but that is the lender's decision. Once a receiver is appointed, the receiver controls the property and the payout runs through them, which takes longer and adds the receiver's costs to the debt. We have funded refinances at both stages, and the earlier one leaves the business in a better position, so call us before the date in the notice passes.

• →refinancing a lender after a receiver is appointed

No. Small Business Restructuring under Part 5.3B is a formal insolvency process, run by a registered restructuring practitioner, for eligible companies that are insolvent or likely to become so. We are a lender rather than restructuring practitioners, and we do not advise on whether that process suits your company. Speak to your accountant or an insolvency adviser about that question. What we can do is fund the contribution a plan requires, or clear secured debt that sits outside it.

It often does, and week one is a much better time to find out than settlement week. Accrued interest, a default margin, discharge and legal costs, and sometimes an exit fee written into the original terms all sit on top of the principal. If the higher figure pushes the total past 70% of assessed value, the options are adding a second property as security, contributing the difference at settlement, or reducing what else gets cleared in the same transaction.

Tell us the date first. If it is set by a notice, an expiring loan or a mortgagee sale, we have a page for that situation, including what to send so we can act quickly.

• →short term urgent loans