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Facility withdrawn

The bank has called in the business loan

Business facilities are usually repayable on demand or subject to covenants and review dates, so a bank can require repayment without you having missed anything. Ask for the deadline and the payout figure in writing, and arrange a refinance in parallel. HomeSec settles directly with the bank on an open term with no covenants.

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It is almost never about you

The hardest part of this situation is the assumption that sits under it — that the bank knows something about your business that you do not. Usually it does not. Facilities are exited because a covenant tripped on a technicality, because a review date arrived in a quarter when the bank was reducing exposure to your industry or your security type, or because a portfolio decision was taken well above the person who has to ring you about it.

That matters practically, because it means the question is not "is my business finished" but "where does this debt live now". Businesses with perfect payment records get exited. It is a financing event, not a verdict.

The first week

  1. 1
    Get the deadline in writing, and ask for more time.Politely, specifically, and by email. A bank that has decided to exit would rather be repaid in an orderly way than enforce, and extensions are given far more often than they are offered. Ask what date they actually require, not what date they mentioned.
  2. 2
    Read the clause they are relying on.Repayable on demand, a covenant, a review date, an event of default. It tells you what room you have and what they must do next, and your solicitor can read it in an hour.
  3. 3
    Request the payout figure and discharge authority.Immediately, because it commonly takes a few business days and nothing settles without it. How to request one.
  4. 4
    Arrange a refinance in parallel with any argument.Disputing the bank's right and finding a replacement are not alternatives. Do both, because the deadline will not wait for the dispute.
  5. 5
    Keep paying whatever is contractually due.An arrears default hands the bank a much stronger position than the one it currently has.

What to refinance into, and what to avoid

The obvious move is another bank. Where there is time, appetite and clean financials, that is frequently the cheapest answer and worth pursuing. The trap is refinancing into another facility with the same shape — a fixed end date, a review, covenants — which buys twelve months and then recreates the situation with less equity and less goodwill left.

 What was calledWhat replaces it here
TermFixed, with a review dateOpen. No fixed end date, no review, no fee to extend.
CovenantsFinancial covenants tested periodicallyNone.
AssessmentServiceability on two years of accountsEquity in property and how the loan is repaid.
RepaymentsMonthly principal and interestInterest only, or capitalised for up to six months.
Who decidesCredit policy set centrallyA Lending Manager who reads the file.

A person decides every loan. Every application is read by a Lending Manager and every credit decision is signed off by a person. We do not use artificial intelligence to assess, approve, decline or price a loan.

How much you can borrow

Take the property's value, multiply by 80% for residential security or 70% for commercial, and subtract what is already owing on it. What is left is roughly what is available, between $20,000 and $5,000,000. Several properties can be added together, and the borrower does not have to be the owner — companies, trusts and sole traders — including start-ups, with everyone on title signing. Up to 80% on residential and 70% on commercial. Lower on large acreage, and LVRs may reduce on properties worth less than $800,000.

Where the equity does not cover the payout in full, a part payment plus an agreed reduction is sometimes acceptable to a bank that wants out. Ask them — it is a conversation worth having before assuming the gap is fatal.

From the call to the money

1

Tell us the deal

Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.

Minutes

2

Conditional approval

Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.

About 15 minutes

3

Funds released

As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.

As little as 24 hours

What it costs

Priced per file, on the property, the position, the amount and the exit. No rate is published, because a rate with "from" in front of it is the best file's number. How it is priced, and every fee that exists.

✓Upfront: a small commitment fee, payable only once your loan is conditionally approved
✓Valuation fee: none — we don't use valuers
✓Monthly or line fees: none — no monthly, line or account-keeping fees
✓Fee to extend: none — no rollover fees, legal fees or rewriting the loan to extend

Questions we get on the phone

Can a bank just call in a business loan?
Business lending is not regulated consumer credit, so the bank's rights come from the contract you signed rather than from consumer protections. Most business facilities are repayable on demand or contain covenants and review dates that let the bank require repayment, reprice, or decline to renew. Read your facility agreement — the specific clause matters, and it is usually shorter and blunter than people expect.
Why would they do it when I have never missed a payment?
That is the most common version of this, and it is rarely about you. A bank exits a facility because a covenant has been breached on paper, because its appetite for your industry or your security type has changed, because a review date arrived, or because a portfolio decision was made several levels above your relationship manager. None of those are a judgement that the loan will not be repaid.
How long will they give me?
It varies enormously, from a few weeks to several months, and it is worth asking for more in writing. A bank that has decided to exit generally prefers an orderly repayment to an enforcement, and will often extend a deadline for a borrower who is demonstrably arranging a refinance. Silence, on the other hand, accelerates everything.
Can you pay out a bank facility?
Yes, where there is enough equity in real property. We settle directly with your bank against their payout figure, and our term is open with no end date and no covenants — which is the point, because refinancing into another facility with a review date simply moves the same problem twelve months out.
What do I need from the bank to start?
A written payout figure and a discharge authority. Request it the day you decide to refinance, because it commonly takes a few business days and nothing can be settled without it. Our guide on getting a payout figure sets out how.
Will the reason they exited stop me borrowing here?
Usually not. We do not assess serviceability, we do not apply covenants, and we do not take a sector view. What we assess is the equity in the property and how the loan is repaid, which is why a business exited for reasons that had nothing to do with its ability to repay is often straightforward here.
Is your loan bigger or smaller than what the bank had?
It is set by the property rather than by income: up to 80% of a residential property's value or 70% of a commercial one, less what is already owing, between $20,000 and $5,000,000. Where that does not cover the payout in full, other property can be added.
Should I fight it?
Take advice on the contract before assuming either way. If the bank has acted outside its agreement there may be something to say, and a commercial dispute lawyer can tell you quickly. But be realistic about timing — a dispute takes months, and the deadline does not usually wait for it, so arranging a refinance in parallel is ordinary prudence rather than surrender.
Can I go back to a bank later?
Yes, and many borrowers do. An open-term facility with no fixed end date means you can refinance to a bank on your timetable rather than under a deadline, once the reason for the exit has passed or a different bank has appetite. Repaying early carries no penalty and unused capitalised interest is rebated.
Request the payout figure today

Whatever you decide about the bank, ask for a written payout figure now. It takes them days and it is the one thing nobody else can obtain for you. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.

Other pressure points
Where to start when cash has run outCannot make payrollBAS due and cannot pay itA supplier has stopped supplyA customer has gone under owing youATO intent to disclose a tax debtServed with a winding-up applicationSmall business restructuring explainedA statutory demand has been servedA Director Penalty NoticeClearing an ATO tax debt
Sixty seconds, no documents

See if you qualify in sixty seconds

Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.

That's the HomeSec Advantage.

See if you qualifyCall 1300 93 83 87Mon–Fri, 8:30am – 5:30pm Melbourne time

Reviewed by Jason Brockmuller, Joint Chief Executive

1300 93 83 87 homesec.com.au
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