When secured and trade creditors want different things

Start by splitting the debt file

When a business is under pressure, one of the fastest mistakes is to treat every creditor as if they want the same answer. A secured creditor has security over company assets, while an unsecured creditor does not. In practice, that usually means the lender is looking at collateral and control, while suppliers are looking at payment and continuity. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors?utm_source=openai))

For a director, that means the first task is simple but critical: separate the debts. List bank facilities, equipment finance, vehicles and any other secured obligations in one column, then trade creditors, subcontractors and other unpaid suppliers in another. That split shows where the pressure is coming from and stops you building one plan for two very different groups. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors?utm_source=openai))

Work out what each group needs

Secured creditors usually care about the value of the security, the repayment pathway and whether they can keep their position protected. ASIC notes that secured creditors have a security interest over some or all of the company’s assets, and that lenders often require that protection. Unsecured creditors, by contrast, are looking for evidence that they will be paid from available trading cash or a negotiated deal. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors?utm_source=openai))

That difference matters because a bank may want updated financials, asset detail and a clear repayment structure, while trade creditors may want shorter terms, part payment or proof that new work will not create a bigger debt. If you ask both groups for the same concession, you can lose credibility with both. A restructure works better when the ask matches the creditor’s actual risk. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/liquidation-a-guide-for-creditors?utm_source=openai))

Source: Official guidance

Build one plan for security, another for trade

Once the debts are separated, prepare a plan for each side. For the secured lender, that might mean refreshed financial statements, updated cash flow information and a proposal that protects or realises the security in an orderly way. Business.gov.au says lenders want current financial documents and projections, because those records help them assess funding and risk. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/voluntary-administration-a-guide-for-creditors?utm_source=openai))

For trade creditors, the plan usually needs a different shape. Trade suppliers often respond to clarity, a defined payment timetable and evidence that the business will keep operating without simply rebuilding the same arrears. ASIC’s creditor guidance also makes clear that unsecured creditors are in a different position from secured ones, so the proposal should not pretend their leverage is the same. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors?utm_source=openai))

Get the sequencing right before you speak

Sequencing can decide whether a restructure gets traction or falls apart. If the bank hears about a weak cash position before you have a supplier plan, it may move to protect its security first. If suppliers hear that the bank has already been dealt with, they may assume they are carrying the rest of the risk. The order of contact should match the pressure points in the file. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors?utm_source=openai))

That is why directors should get advice before they start promising outcomes. ASIC explains that in insolvency contexts, secured creditors may have different enforcement rights and unsecured creditors may be restricted from starting or continuing claims without consent or the court’s permission. In other words, the legal and practical sequence matters, even before any formal appointment is on the table. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/voluntary-administration-a-guide-for-creditors?utm_source=openai))

Use the next conversation to reset the file

The immediate next step is to put the debt stack in order, identify which creditor is secured and which is not, and write two separate talking points before anyone is called. One should be built around security, timing and lender confidence. The other should be built around trade continuity, payment terms and the minimum cash needed to keep moving. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors?utm_source=openai))

If the mix is already too tight to manage alone, get advice on sequencing before you approach creditors in the wrong order. CRP can coordinate independent qualified professionals to help you map the restructuring path and prepare the conversations. This is general information only, not legal or financial advice. Call CRP today about debt restructuring. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/voluntary-administration-a-guide-for-creditors?utm_source=openai))