The lender’s conditions could make recovery harder.
A lower repayment is only one part of a lending offer. Check conditions that affect cash access, asset use and ordinary business decisions before calling the facility a rescue.
Corporate Recovery Partners
01 / 06
The loan is approved but the conditions bite
A landscape supplier receives a funding offer that appears to cover its overdue accounts. The conditions also restrict equipment sales and require frequent reporting. The owner had planned to sell unused machinery to rebuild cash, so the recovery forecast and the loan terms may conflict.
Collect the agreement, schedules, security documents and referenced conditions. Mark any requirements affecting cash balances, reporting, asset dealings or further borrowing. Ask the lender to explain unclear terms in writing.
Do not treat the broker summary as the complete agreement. The business needs to know which conditions apply before funds arrive and which continue throughout the facility.
List planned sales, purchases and staffing changes, then identify any consent that may be needed. Ask a lawyer to assess the contractual effect instead of assuming every restriction is standard and harmless.
In the supplier example, the proposed equipment sale needs to be considered before it is counted as available cash. A recovery action cannot support the forecast if the lender may prevent it.
Include fees, reporting work and the effect of money that must remain unavailable for operations. Business.gov.au recommends understanding funding options and their implications, including repayment and ownership trade-offs.
Have the accountant test the offer using the actual conditions. An apparently affordable repayment may coexist with a cash requirement the business cannot maintain during a slow collection month.
Ask whether a required action can be expressly permitted or the condition changed. Record the accepted wording and any approval process. A verbal assurance that the lender will be flexible later is not a reliable planning assumption.
If the offer no longer supports recovery, review alternatives promptly with qualified advisers. Avoid accepting an unsuitable facility solely because substantial application time has already been spent.
