Direct answer
A debt restructure or workout loan refinances distressed or underperforming facilities, funds an exit from receivership, or consolidates multiple lenders into a single, workable structure. In Australia it is secured by a first or second mortgage and a general security agreement over residential or commercial property and business assets, typically runs three months to three years, and is arranged through private lenders and specialist funds for borrowers, insolvency practitioners and their lawyers.
Who uses it and why
Distressed debt situations rarely have a single cause and rarely have a simple fix. A business has drawn facilities from several lenders over time — a bank term loan, a private second mortgage, a working capital facility — and the combined servicing burden has become unsustainable even though the underlying business or asset remains fundamentally sound. A company is in or approaching receivership, and the directors, or an appointed insolvency practitioner, need funding to complete a transaction that will resolve the appointment and preserve value for stakeholders. A property has fallen into a distressed position — a construction project stalled, a facility called by an existing lender — and needs a new lender willing to look past the current state to the underlying value.
This is a genuinely case-by-case product: no two workout situations look the same, and lenders active here are set up to build a bespoke structure around a specific, often urgent, set of facts rather than fitting the borrower into a standard product. Typical borrowers are directors managing multiple lenders and a servicing burden that no longer fits the business, companies exiting or avoiding receivership, and their lawyers and insolvency practitioners arranging the finance behind a workout.
Timing is often the single biggest constraint in a workout situation — a receivership deadline, a lender's demand notice, or a court timetable can compress what would otherwise be a considered process into days or weeks. Engaging early, before a position becomes acutely urgent, generally widens the range of lenders willing to look at the file and improves the terms achievable, compared with a facility arranged under maximum time pressure.
What lenders look at
Security and current asset value are assessed carefully and often independently of how the position deteriorated — a lender in this category wants to understand what the asset is genuinely worth today, not what it was valued at when the original facilities were drawn. Loan-to-value ratios typically extend to 65–75%, informed heavily by an up-to-date valuation and the specific circumstances of the distress.
The story matters enormously: how did the position become distressed, is it a temporary trading setback or a structural problem, and what does a successful outcome look like — a sale, a trading recovery, a return to conventional finance once the position is stabilised. Lenders in this category, largely private lenders and specialist funds given the complexity and urgency involved, will often work directly with the borrower's lawyers, accountants or an appointed insolvency practitioner to structure a facility that genuinely resolves the position rather than simply deferring it.
Documentation tends toward full-doc or alt-doc, since a workout situation typically requires the lender to understand the full financial picture — existing facilities, current arrears if any, and the plan for resolution — even where the timeframe is tight. Credit history carries the widest tolerance in the category: this product exists specifically for borrowers whose credit position is already under pressure, and defaults, judgments or an active insolvency process do not exclude an application, provided the security and the workout plan are credible.
Typical terms
|
|
| Size |
$500,000 to $50m+, subject to lender assessment |
| LVR |
Typically up to 65–75% |
| Term |
Three months to three years |
| Speed |
Indicative funding in 7–28 business days from a complete application |
| Security |
First or second mortgage and a GSA over property and business assets |
| Pricing |
Priced on risk and security; indicative range on enquiry |
Structures we see most
Receivership exit facility. Funds the transaction or refinance needed to bring a receivership appointment to an end, typically arranged in close coordination with the appointed receiver or administrator and the company's directors.
Multi-lender consolidation. Replaces several existing facilities — drawn from different lenders over time — with a single, coherent structure, simplifying the servicing position and often improving the overall cost and terms compared with the fragmented arrangement it replaces.
Distressed asset refinance. Refinances a facility a lender has called or is unwilling to renew, secured against the current, independently assessed value of the asset rather than its original financed position.
Trading recovery bridge. Provides breathing room for a business working through a temporary but genuine setback, structured with a term long enough to allow trading performance to recover before the facility itself needs to be refinanced or repaid.
Insolvency practitioner-coordinated facility. Arranged in direct coordination with an appointed administrator, receiver or liquidator, where the finance forms part of a broader, formally managed resolution process.
Interim standstill facility. Provides short-term breathing room while a more permanent restructure or sale process is negotiated, giving all parties time to reach a considered outcome rather than being forced into a rushed decision under immediate pressure.
Costs and how we're paid
Pricing on debt restructure and workout loans reflects the complexity and urgency of the situation, the security available and the credibility of the resolution plan, and is quoted on enquiry once a lender has reviewed the full position — no flat rate applies across the product, and pricing here generally reflects the elevated risk and bespoke structuring involved. Facilities may carry an establishment fee; all costs are set out in the loan offer before a borrower commits.
Solara is remunerated by the lender, the borrower, or both, depending on structure, which may include a commission from the lender and/or a broker fee agreed with the borrower. Any commission or fee is disclosed in writing before an application proceeds.
Process and timing
- Initial scoping call — typically same day. We map the existing facilities, the current distress position, the security available and the intended resolution.
- Document collection — typically 2–5 business days. Details of existing facilities, current valuations, financials, and any insolvency or receivership documentation involved.
- Lender matching and submission — typically 2–4 business days. We place the file with the private lenders and specialist funds equipped to assess and structure a workout of this complexity.
- Approval and offer — typically 5–20 business days, reflecting the bespoke structuring most workout facilities require.
- Documentation and settlement — typically 3–10 business days once terms are accepted, security is registered, and any receivership or administration matters are formally resolved.
Frequently asked
What is a debt restructure or workout loan?
It is finance used to refinance distressed facilities, fund an exit from receivership, or consolidate multiple lenders into a single workable structure, assessed on current asset value and a credible plan for resolution rather than a standard lending checklist.
Can this type of loan help avoid receivership?
In many cases, yes — refinancing a called facility or consolidating multiple lenders before an appointment is made can resolve the underlying pressure and avoid a formal insolvency process altogether, provided it is arranged early enough.
What if my company is already in receivership?
Funding to exit a receivership appointment is a core use of this product, typically arranged in coordination with the appointed receiver and the company's directors as part of a broader resolution.
Can I consolidate several existing lenders into one facility?
Yes — replacing multiple facilities with a single, coherent structure is one of the most common uses of this product, generally simplifying the servicing position and, where the numbers support it, improving overall terms.
Will my credit history or an active insolvency process stop me getting finance?
No — this is the widest-tolerance product in the category by design, since it exists specifically for borrowers already under credit or insolvency pressure. What matters is the security and the credibility of the plan for resolution.
How fast can a workout facility be arranged?
Indicative funding runs from around seven to twenty-eight business days, though genuinely urgent situations, such as an imminent receivership appointment, can sometimes move faster depending on how quickly documentation and valuations can be obtained.
Do I need a lawyer or insolvency practitioner involved?
Not always, but for more complex situations — an active receivership, a formal restructure, multiple secured creditors — coordinating with the borrower's lawyer or an insolvency practitioner is standard practice and often essential to a workable outcome.
What happens after the workout facility settles?
The facility is generally structured with a defined term to allow the business to stabilise or the asset to be sold, with an expectation that the borrower will refinance to more conventional terms, or repay through sale, once the immediate distress is resolved.
How is pricing determined on a workout facility?
Pricing reflects the complexity, urgency and risk of the specific situation rather than a standard rate card, and is generally higher than conventional finance given the bespoke structuring and elevated risk most workout situations involve, with an indicative range provided once the position has been assessed.
Related products
Impaired-credit commercial loans — the better fit once the immediate distress is resolved but the borrower's broader credit history still needs a wide-tolerance lender.
ATO debt refinance — worth considering directly where a tax office debt is the primary driver of the distressed position rather than a broader multi-lender situation.
Second mortgages — the closer match where the requirement is simply releasing additional equity rather than a full restructure of existing facilities.