Urgent Short Term Loans to Pay a Creditor's Statutory Demand
Have the funds ready inside the 21 days, while your lawyer deals with the demand itself
Experts in strategic, short-term finance
A statutory demand gives a company 21 days to pay the debt, give the creditor security for it, or agree a settlement the creditor accepts. If the company does not comply, a court must presume it is insolvent on a winding-up application made in the next 3 months. We know how much pressure that puts on a business, and we can fund payment of the demand in as little as 24 hours.
We fund payment of statutory demands from the ATO, trade creditors and other lenders, for companies across Australia, from $250,000 to $10 million. We do not give legal or insolvency advice. Your lawyer can advise on the demand itself, and we can connect you with insolvency specialists in our network. A loan adds a new debt. If the company is insolvent, a payment to one creditor within the 6 months before a liquidation can be recovered by the liquidator as an unfair preference, so speak with those specialists before you borrow.
The two 21-day deadlines
The same 21 days apply to two different things. The company must pay the debt, or reach an agreement with the creditor, within 21 days of the demand being served. If the company disputes the debt, an application to set the demand aside must also be filed and served within those 21 days, and that deadline is strict. Call your lawyer and us on the same day, so a set-aside application or the payment can be ready inside the 21 days.
What happens after the 21 days
- •The company is taken to have failed to comply with the demand
- •For the next 3 months, a court must presume the company is insolvent if a winding-up application is made
- •A creditor, including the ATO, can apply to the court to wind up the company
- •Grounds the company could have raised in a set-aside application usually cannot be raised later without the court's leave
- •Where the ATO issued the demand, it says it may use non-payment as evidence that the company is insolvent
Uses of the loan
- •Paying the demand in full within the 21 days
- •Paying a settlement amount your lawyer has agreed with the creditor
- •Clearing several creditors at once, where the insolvency specialists in our network or your accountant have reviewed the company's finances
- •Legal costs relating to the demand
Funding a demand
First call. Tell us the amount, the date the demand was served and the property you can offer. Terms can be agreed the same day, depending on your scenario.
Valuation. We value the property, usually within a day or two.
Letter of offer. Sign the letter of offer as soon as you are ready to proceed.
Settlement. Settlement can take place within 24 hours of signing, with the creditor paid from the settlement funds.
Documents for a statutory demand loan
- •The statutory demand and the date it was served
- •The supporting affidavit, if one came with the demand
- •Your lawyer's view on whether the debt is disputed
- •The property you can offer, and its current loan balance
- •Your repayment plan
Loans that can pay a statutory demand
- •Caveat loans: registers quickly, which suits a 21-day deadline
- •Second mortgage: over property that already has a bank loan
- •First mortgage: over property with no loan on it
- •ATO tax debt loans: where the demand has come from the ATO
- •Bridging loans: where the sale of a property will repay the loan
Statutory demand loan terms
| Loan feature | Detail |
|---|---|
| Loan size | $250,000 to $10,000,000 |
| Interest rate | From 9.7% p.a. (first mortgage), from 11.95% p.a. (second mortgage) |
| Term | 1 to 24 months, interest only |
| Maximum LVR | 70%, including any existing mortgage |
| Security | A first or second mortgage, or a caveat, over residential, commercial or industrial property |
| Settlement | From 24 hours |
Planning the repayment
Typical repayment plans are a bank refinance once the demand is paid, the sale of a property, or a debt owed to the company that is due to be paid. Because an unpaid demand can point to insolvency, we look closely at whether the company can meet its other debts, and we will ask how the company will pay its other creditors and running costs.
ATO wind-ups we have funded
“A statutory demand leaves 21 days, and the lawyer needs some of them, because a disputed debt must be challenged within the same period. Where the debt is owed and the company has property, we can have the funds ready while the lawyer prepares any response to the demand. We lend on the property, and the creditor is paid at settlement.”
Gino Tabila
Associate Director
Frequently Asked Questions
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Get an indicative offer within hours, not weeks.
No credit check. No obligation.
Why Secured Lending?
Are you a broker? Find out why brokers love working with us.
Other Urgent Loans We Fund
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