Commercial debt restructuring
Is your commercial debt working against you?
Restructuring reorganises business and commercial property debt so it fits your cash flow and plans: consolidating facilities, extending terms, moving to a lender better suited to your situation, or releasing equity to ease pressure. It works best when it starts early, well before a facility expires or a covenant is breached.
How it works
- ReviewEvery facility, its costs and its deadlines, in one picture
- PlanA structure built around realistic cash flow
- PresentThe case taken to banks and non-bank lenders that suit it
- NegotiateTerms, covenants, timing and exit costs agreed
- RefinanceNew facilities in place, with review dates set
Who it suits
- Businesses with facilities spread across several lenders
- Owners facing a facility expiry, rate reset or annual review
- Borrowers whose bank wants to reduce its lending
- Investors rebalancing a commercial property portfolio
- Businesses recovering from a difficult trading period
What lenders look at
- Up-to-date financial statements and a cash-flow forecast
- Interest cover and debt service across all facilities
- Security values and available equity
- A clear plan showing how the restructure improves the position
What to prepare
Tick them off as you go.
Questions to ask
- What break costs and exit fees apply to current facilities?
- Will the new lender need personal guarantees?
- What covenants and reporting will apply?
- Is a short-term non-bank facility, with a path back to a bank, the right plan?
- Should my accountant and lawyer be involved now?
Everyone's situation is different. Lenders weigh things differently and small details change the answer. An adviser can tell you where you stand with commercial debt restructuring and what to do next.
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Guides
Restructuring commercial debt: act before the deadline
The best time to restructure is before you have to. Early signs include a facility expiring within a year, an annual review with new conditions,…
Read the guideCommercial · 1 min readInterest cover: how commercial lenders size a loan
For commercial property and business lending, the key test is interest cover: the income available to pay interest, divided by the annual interest. A…
Read the guideEvery situation is different
Tell us what you're planning and an adviser will work through your options with you.