Do you have a Commercial Bill that is expiring or under review by your current bank? Are your current loans straining your cash flow? We can help you restructure your current commercial loans to achieve better terms and streamline your business cash flow. We strive to help you recapitalise your business, strengthen your personal balance sheet, and free up cash to invest for future growth. We can also help rescue loans where a bank has asked you to leave, by working across our panel of commercial banks and alternative lenders.
What is commercial debt restructuring?
Commercial Debt Restructuring is the refinancing of commercial debt to achieve better terms, replace one debt product with a more appropriate one or to help get a commercial borrower out of a difficult situation.
It can also be done to help capitalise a business for future growth or rebuild a business owner’s personal balance sheet.
What are the benefits of restructuring my commercial loans?
Restructuring Commercial Debt can have several benefits including:
- Lowering your interest rate and achieving rate savings
- Lowering your cash flow commitments by requesting interest only repayments or extending your loan term
- Helping you pay down your loan by setting the loan to Principal & Interest
- Achieving certainty or hedging against future rate increases by requesting a fixed rate loan
- Replacing “Hard Core” debt on your overdraft with a loan with a longer term
- Releasing your securities or unwinding cross-collateralisation
- Achieving higher leverage where your property values have gone up
- Getting you out of a difficult or costly situation such as when your bank has asked you to leave
- Changing banks after a relationship breakdown or demonstration of poor service
- Recapitalising your business for future investment and growth
- Recapitalising your personal balance sheet for personal wealth creation
When is the right time to restructure my commercial loans?
Suitable times to restructure commercial debt include:
- 2 – 3 months before the expiry of your current facilities
- When you are making good income but your loans are straining your cash flow
- When a fixed loan has reverted to variable
- When you find your overdraft has a balance that is always outstanding and that you can’t seem to reduce it
- When your property has gone up in value
- When your business is doing well and you have some concrete plans to grow it further
- When you have contributed a lot of your personal funds into the business and would like to take it back out
- When the bank has asked you to leave or your are unhappy with your current relationship
Can you refinance shareholders loans?
Yes, for a business that is performing strongly, shareholders loans can be refinanced to return capital to the directors and shareholders of the business.
Often the business has to have sufficient value and profit for the loan can be secured against the good will of the business, otherwise it will need to be property backed for the loan to be refinanced.
Can you refinance shareholders loans?
Yes, for a business that is performing strongly, shareholders loans can be refinanced to return capital to the directors and shareholders of the business.
Often the business has to have sufficient value and profit for the loan can be secured against the good will of the business, otherwise it will need to be property backed for the loan to be refinanced.
What are the supporting documents required?
A full financial assessment is required for a major bank to restructure your commercial debt. Supporting documents include:
- Drivers license and passport
- Last 2 Years Company / Trust Tax Returns & Financial Reports
- Last 2 Years Individual Tax Returns & Notice of Assessments
- Last 12 months ATO Integrated Client Account and Integrated Tax Account
- Latest loan statement for properties owned + recent transaction history showing account conduct
- Statement of Assets & Liabilities
- Proof of ownership and rental income of all property related securities
Please note this list is client dependent and will be tailored for each client’s unique scenario. A fuller list will be sent to you should you wish to make a full debt restructure enquiry.
What LVR is achievable on my commercial property?
Normal Commercial LVRs apply when looking to restructure your loans. The typical commercial LVR is 65% however this can change depending on bank, property purpose and security offered. For example:
- 80% LVR is available for Commercial Loans under $1M
- 70 – 75% LVR can be available for Commercial Loans over $1M when residential security is offered or the property is Owner Occupied
- 50 – 65% is only available for specialised assets
- 50% LVR or less may be offered if the loan is secured against the value of the business alone
Please note each scenario is unique and our tailored advice will be provided after an assessment of your unique scenario is completed.
What are the costs of restructuring my commercial loans?
Fees to restructure a commercial loan can include:
- Valuation Fees
- Lenders Establishment Fee
- Lenders Legal Fee
- Ongoing Fees
- Government registration fees
We will always make sure there is a commercial benefit in restructuring your debt before proceeding to do so.
How long does it take to restructure my commercial loans?
This can depend on the complexity of the transaction. We typically budget 4 – 6 weeks to refinance a straightforward commercial loan.
Where a portfolio of loans is involved and the structure of your loans or entities is complex we expect to take 8 – 12 weeks. This is why it is important to engage our services before your loans are expiring, rather than when the bank has decided to terminate your loan.
Can you remove personal guarantees when debt restructuring?
If you do not have more than that, we can consider using a Family Guarantee if your parents have equity in the property. You can also consider paying Lenders Mortgage Insurance if you and the property you are buying are eligible.
With both these solutions, you must be able to demonstrate you can afford the higher loan repayments that come with a higher loan amount.