An interest-only period is ending while cash remains tight

The current payment is temporary

Suppose a business has been making interest-only payments while rebuilding cash. The owner has become used to that amount and treats it as the normal debt cost. The facility documents show a different repayment phase beginning in two months. Obtain the current lender schedule and review the transition now, rather than letting the smaller historical payment define the forward plan.

Confirm what changes and when

Ask the lender for the applicable dates, expected payment amounts and any conditions or calculation assumptions. Preserve the written information and have uncertain terms reviewed. Do not calculate the new obligation from a generic online example or assume it will be only slightly higher. The actual facility may include features that need explanation before the cash impact is understood.

Show the transition in the forecast

business.gov.au's cash guidance recommends considering the amount and timing of future outgoing payments. Enter the confirmed repayment phase from its starting date and label any estimates. In the hypothetical example, a step-up partway through the quarter should be visible in that week or month. An annual average could hide the immediate funding pressure.

Source: business.gov.au: Set up a cash flow statement

Test the operating cash available

Review receipts and current expenses around the transition with the accountant. Separate confirmed income from hoped-for work and identify other commitments falling nearby. Do not assume an improving sales pipeline will cover the change without examining when customers actually pay. The review needs to show whether ordinary operations can support the revised obligation, not merely whether turnover is growing.

Discuss options before treating them as agreed

If the schedule does not fit, speak with the relevant advisers and lender promptly. Ask what information would be needed to assess any proposed change. Keep a request for an extension or refinancing separate from an approved arrangement. Do not remove the scheduled step-up from the forecast because a conversation about more time has begun.

Monitor the first payments under the new phase

Check the actual debit against the verified schedule and update the cash view for any difference. CRP can help organise the commercial information for the discussion. The objective is to recognise the temporary nature of the earlier payment and make a supported decision before the full repayment burden arrives, while there is still time to obtain appropriate advice.