Using a 2nd Mortgage: A Strategic Tool for Small Business Restructuring

Mark Hutchins

Mark Hutchins

Director - Secured Lending

Using a 2nd Mortgage: A Strategic Tool for Small Business Restructuring

As we reflect on a busy year-end at Secured Lending, filled with successful deals finalised just before the holidays, one particular case stands out. It involved a loan that played a crucial role in a Small Business Restructuring Plan (SBRP), showcasing the power of using a 2nd mortgage for business turnaround.

This case highlights the challenges many small businesses face and the potential solutions that Secured Lending can provide. The business in question was profitable and operational, but a recent management shift threw a wrench into their well-being. The newly appointed General Manager, unfortunately, failed to prioritise crucial financial obligations, leading to a significant outstanding tax debt alongside neglected trade creditors. This snowball effect left the business owner burdened with a substantial amount of debt and in desperate need of a solution.

Here’s where the expertise of Secured Lending and the strategic use of a second mortgage came into play. We were approached to participate in the business’s SBRP, a plan designed to navigate them out of financial difficulty. Recognising their potential and long-term viability, our team stepped in and provided a much-needed $300,000 loan. This critical funding was secured by a second mortgage on an investment property owned by the business owner.

The funds provided through the second mortgage played a dual role in the SBRP. Firstly, it allowed the business to clear a portion of their outstanding tax debt, alleviating immediate pressure and demonstrating good faith to the authorities. Secondly, the remaining funds were injected back into the business itself. This capital injection served as a life raft, providing the resources needed to stabilise operations, pay off creditors, and ultimately get back on track towards long-term success.

This case is a prime example of how using a 2nd mortgage can be a strategic tool for business restructuring. It offers several key advantages:

  • Access to Capital: When traditional lenders hesitate due to existing debt, a second mortgage on a personally held asset unlocks additional capital that can be crucial for the business’s survival.
  • Quick Turnaround: Compared to lengthy traditional loan applications, second mortgage options often provide a faster turnaround time, injecting vital funds into the business when they need it most.
  • Flexibility: The terms of a second mortgage can be structured to fit the specific needs of the business’s SBRP. This allows for tailored solutions that address the unique challenges each situation presents.

A Message to Debt Advisors, Insolvency and Restructuring Practitioners

At Secured Lending, we understand the complexities of business restructuring. We have the experience and knowledge to navigate these challenging scenarios and become a strategic partner in your efforts to assist business owners. If you’re working with a client in need of financial solutions to support their SBRP, consider using a 2nd mortgage as a potential strategy.

Our team is here to discuss the specifics of each situation and explore how a second mortgage can be leveraged to achieve a successful business turnaround. We believe in the potential of small businesses and are committed to providing them with the tools they need to overcome obstacles and thrive.

Contact Secured Lending today and let’s explore how we can work together to craft a successful SBRP for your clients, utilising the strategic benefits of using a 2nd mortgage.

How can Secured Lending Help?

Small business restructuring plans in Australia provide a lifeline for struggling enterprises to regain their financial footing and continue contributing to the economy.

Short-term business loans play a crucial role in supporting these plans by providing much-needed capital flexibility. If your small business is facing financial challenges, don’t hesitate to explore the benefits of restructuring and consider short-term business loans as a viable solution on your path to recovery and success. Consult with financial experts and leverage the available resources to ensure a smooth and successful restructuring journey.

Secured Lending understand the complexities of debt for businesses and the potential benefits of short-term loans. Our experienced team is here to guide you through the process  and helping you explore suitable financing options to address your debt effectively. 

Our loan products are designed to provide short term relief in circumstances where funding is not immediately available from traditional sources of finance, such as banks and other first tier institutions. These include:

We aim to implement our solutions as a matter of priority so that you can resume business as usual, with full control of your company.

If you or your client are in need of finance and need to speak to one of our experts, contact us on 1300 795 175 or email us at

Using a 2nd Mortgage

Secured Lending


Secured Lending focuses on non-conforming, short term funding solutions with incredibly quick turnaround times. So why Secured Lending?
  • We have our own internal property valuation team.
  • We can settle caveats, 1st and 2nd mortgage loans within 24 hours up to $45m.
  • We pride ourselves on being transparent and honest in our approach, always aiming to have an initial assessment back to you in a few hour

Our rates start at 9.95% p.a. with loan terms from 1 – 24 months.

 If you have a scenario to discuss, please call us on 1300 795 175.
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