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Jansen Walsh & Grace

Loan guarantee

The federal government is guaranteeing 50% of new unsecured and secured loans issued by the major and smaller banks and other eligible lenders to small and medium sized businesses, including sole traders.  The purpose is to permit you to get access to the funding you need to adapt and innovate during the coronavirus crisis.

The federal Treasurer has now announced that the scheme will be expanded by:

   extending the purpose of loans able to be provided beyond working capital, so that a wider range of investment can be funded;

   permitting secured lending (excluding commercial or residential property);

   increasing the maximum loan size to $1 million (from $250,000) per borrower;

   increasing the maximum loan term to five years (from three years); and

   allowing lenders the discretion to offer a repayment holiday period.

The Scheme will be available until 30 June 2021.  For more information, visit the website.

Radical change to allow companies get out of insolvency
The federal Treasurer has announced that he will introduce legislation to a new debt restructuring process for companies with liabilities of less than $1 million.  This will involve moving from the current rigid one-size-fits-all “creditor in possession” model to a more flexible “debtor in possession” model which will allow eligible small businesses to restructure their existing debts while remaining in control of their business.  There will be a rapid 20 business day period for the development of a restructuring plan by a small business restructuring practitioner, followed by fifteen business days for creditors to vote on the plan.  There will also be a new, simplified liquidation pathway for small businesses to allow faster and lower cost liquidation.

"My business is in financial difficulty"

This second lockdown is creating cashflow challenges for most businesses. It is important to remember though that there are steps you can take and, generally, the earlier you seek help, the more options are likely to be available to you.

The sections below highlight some of the many ways in which we can help businesses experiencing financial problems during this second lockdown


If your company is struggling to find a way of paying its creditors, the spiral of debt may seem inescapable. All is not necessarily lost. Administration could be an option for your company. It is a way of rescuing your company through the appointment of an administrator who restructures your company in order to pay its debts. Crucially, it releases your company breathing space to deal with its creditors. We will guide you through the process, advising on your rights and your responsibilities.

Deed of Company Arrangement

When creditors are putting you and your business under pressure, you may feel that negotiation is impossible. However, a deed of company arrangement is a process of compromise which could allow your company to pay its unsecured creditors an agreed amount with the remainder of its debt being written off. Talk to us about whether a Deed of Company Arrangement could be an option for your company.


When your bank or other secured lender has decided that they have waited long enough for their money, they may appoint a receiver and manager whose job it is to take over the management of your business. The receiver’s aim is to make enough money to pay some of your liabilities, including the sums owed to the secured creditor. This process does not necessarily spell the end of your company and liquidation does not have to be the next step. Talk to us about achieving the best possible outcome.


If your business is unable to pay its debts then a creditor can put the company into liquidation, which means that it is brought to an end. A liquidator is appointed to realise any assets in order to pay liabilities. You may be forced into liquidation by a creditor, but there are circumstances in which voluntary liquidation is a sensible step to take (to avoid liability for insolvent trading, for example). We may be able to help you protect your position, whatever stage your debt problems have reached.

Bankruptcy Proceedings

If you are struggling to pay personal, as opposed to business, debts, then bankruptcy could be imminent. The process can be started by a creditor, or by you. Either way, it is important that you protect assets including your family’s interest in your matrimonial home. We are here to advise on the right steps to take at the right time.

Structured Arrangements with Creditors without Bankruptcy

If you are unable to pay all of your personal debts, but could afford to pay some, an arrangement with creditors could be right for you. We could help you negotiate payments to your creditors, releasing you from liability to pay any more and stalling or eliminating the risk of bankruptcy.

Debt and Asset Recovery

The commercial reality is that you may be unable to pay your creditors until you have been paid money that you are owed. We can help you recover debts and any assets that are due to be returned to you because of a debtor’s default on payments.

Property Sale

While your business or personal property may be precious, it is also a valuable asset that you could sell to satisfy your debts. The ramifications of losing your premises or your home can be serious, so talk to us about how this could work for you. If you decide to press on with the sale, or are forced into it, we can drive the legal process through while protecting your personal and professional position.