When your home secures business debt, act before the bank does
When the house is tied to the loan
Once a home secures a business loan, the pressure moves from the company ledger to the front door. ASIC says a bank may ask for a mortgage over your house to secure company repayment, and if the company does not repay as agreed, the bank may enforce that security by taking possession or selling the home. ([asic.gov.au](https://asic.gov.au/for-business/small-business/starting-a-small-business-company/small-business-company-directors/company-director-liabilities-when-things-go-wrong/?utm_source=openai))
That is why the first reaction should be practical, not emotional. ASIC tells businesses facing financial difficulty to take action straight away and contact the bank or lender early. The value of that advice is simple: it keeps the file in negotiation territory for longer, while there is still room to reshape the debt or the timing. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/business-basics/for-businesses-facing-financial-difficulties?utm_source=openai))
Get the real position in writing
Call the bank today and ask for the arrears figure, any default notice already issued, the amount needed to stop further action, and the name of the person handling the file. Then ask for more time in writing, even if the answer is short. A written reply gives you a clean record of what was requested and what was refused. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/business-basics/for-businesses-facing-financial-difficulties?utm_source=openai))
While you are on the phone, check whether the problem is a short cash squeeze or a broader debt issue. List every other payment due from the business and the household over the next fortnight. If the shortfall is wider than one missed instalment, you need a plan that deals with the whole picture, not just today’s arrears. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/business-basics/for-businesses-facing-financial-difficulties?utm_source=openai))
Source: Official guidance
Test refinance honestly
Refinancing can help, but only if the numbers actually work. ASIC’s refinancing guidance says to compare offers carefully, do the maths and check whether equity, fees and your credit position support a switch. If the equity is there and the repayment is realistic, refinance may buy breathing room without forcing a rushed sale. ([asic.gov.au](https://asic.gov.au/about-asic/news-centre/news-items/switching-home-loans-asic-tips-for-refinancing/?utm_source=openai))
If the gap is large, do not spend days chasing a loan that will not stack up. A lender will care about what the property is worth and whether the new repayment can be met from real income, not hope. The honest answer may be that refinance is part of the solution, not the whole fix. ([asic.gov.au](https://asic.gov.au/about-asic/news-centre/news-items/switching-home-loans-asic-tips-for-refinancing/?utm_source=openai))
A sale you control can protect value
If refinance looks weak, selling the property yourself may preserve more control than waiting for mortgage enforcement. A controlled sale lets you choose the agent, present the property properly and line up settlement around the business position. It does not remove the debt, but it can protect equity and reduce the shock of a forced timetable. ([asic.gov.au](https://asic.gov.au/for-business/small-business/starting-a-small-business-company/small-business-company-directors/company-director-liabilities-when-things-go-wrong/?utm_source=openai))
Legislation material on mortgagee sales says proceeds are generally applied first to sale costs, then to the mortgage money, interest and other amounts due under the mortgage, although the exact rules differ across states and territories. That is why a bank-led sale can leave less room to manage the outcome on your own terms. ([legislation.gov.au](https://www.legislation.gov.au/F2020L01291/asmade/2020-10-09/es/original/pdf?utm_source=openai))
Use the next 48 hours well
Before the next deadline, gather the loan contract, mortgage papers, arrears letters, recent statements, a current cash flow and a list of the business and household debts that now compete for cash. ASIC says businesses in financial trouble should act early and get proper advice as soon as possible, because delay narrows the options. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/business-basics/for-businesses-facing-financial-difficulties?utm_source=openai))
If you want help working through a standstill, refinance test or controlled sale path, CRP can coordinate independent qualified professionals to review your debt restructuring options without promising an outcome. Call the bank today, ask for time in writing, then call CRP today about debt restructuring. This article is general information only and not legal, financial or insolvency advice. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/business-basics/for-businesses-facing-financial-difficulties?utm_source=openai))