Quick answer
When the planned exit for a short-term secured loan slips, the priority is to act early: tell the lender, assess why the exit is late, and put a credible plan B in place. Plan B might be a price adjustment, a different refinancing lender, the sale of another asset or converting to a longer structure. The loans are flexible and can stay in place, but early action keeps costs and options under control.
Key points
- Tell the lender as soon as you know the exit will be late
- Find out why it slipped before choosing a fix
- Plan B options: price, process, lender, asset or structure
- Keep interest and LVR in view as time passes
- Document the revised plan with evidence
Exits slip more often than people expect
Every short-term secured loan begins with a plan for repayment. In practice, plans often take longer than expected. A sale campaign attracts less interest than forecast. A bank asks for another set of documents. A client’s payment is delayed by a dispute. A council takes months longer to approve a development. None of these means the deal has failed. They mean the timeline needs adjusting, and the way you respond determines how much it costs.
Step one: tell the lender early
The single most important step is early communication. As soon as you can see the exit will be late, tell the lender. Explain what has happened, what you are doing about it and when you now expect the exit. Lenders deal with delays regularly. What concerns them is silence followed by a missed maturity date. Early notice lets everyone plan calmly, and the loans we arrange are flexible enough to stay in place while a revised plan is completed.
Step two: diagnose why it slipped
Before choosing a fix, understand the cause. The right plan B depends on it.
- Price. The property is not selling because the asking price is above what buyers will pay.
- Process. A refinance or sale is moving slowly because of documents, approvals or third parties.
- Market. Demand has softened generally, and everything is taking longer.
- Counterparty. A buyer’s finance has fallen through or a client is disputing an invoice.
- Fundamentals. The exit was never realistic, for example a refinance the borrower does not qualify for.
Plan B options
Adjust the price. If the property is overpriced, a realistic price adjustment often achieves a sale quickly. The cost of a lower price may be less than months of additional interest.
Fix the process. Chase documents, change agents or conveyancers, or escalate with the refinancing bank.
Change the lender. If one bank will not refinance, another may. Some specialist lenders suit particular property types or borrower profiles.
Sell a different asset. Another property, a share portfolio or business equipment might be sold to repay part or all of the loan.
Partial repayment. Reducing the balance with available funds lowers the LVR and makes an extension simpler.
Change the structure. A caveat can later be converted to a registered second mortgage, or a short loan refinanced into a longer one. See converting a caveat.
Lease rather than sell. If a property is not selling, leasing it can support a refinance to an investment lender.
Keeping an eye on the numbers
As time passes, capitalised interest increases the balance and, if values are softening, the LVR can rise. Recalculate peak debt under your revised timeline and check that the exit still covers it. If the margin is thin, a partial repayment or additional security may be needed. The bridging cost estimator and the exit strategy timeline help you update the picture.
Talk to us if your exit has slipped, whether your current loan is with us or another lender.
Illustrative example
Illustrative only. A business took a nine-month bridging loan to buy new premises, planning to repay by selling its old building. After six months, the old building has attracted little interest at its asking price. The owner tells the lender, asks the agent for an honest view and learns that the price is above recent sales. She reduces the price, receives an offer within weeks and agrees a twelve-week settlement. The lender agrees to keep the loan in place for the extra period, with interest continuing to capitalise. The sale settles and repays the loan.
When the original exit is no longer viable
Sometimes the diagnosis shows the original exit will not happen at all: a refinance the business cannot qualify for, or a development approval that has been refused. Then the plan B must be a genuinely new exit, with evidence. That might be selling the property as is, bringing in a partner, or restructuring the business’s debts more broadly. If the business’s position is fundamentally difficult, get advice from your accountant early, and look at the warning signs and guidance on business.gov.au.
Refinancing to another lender
If your current lender cannot or will not extend, refinancing to another private lender can buy the time needed, provided there is enough equity and the revised exit is credible. See expiring private loans. Compare the total cost of the refinance, including new fees, against the cost of a short extension with the existing lender.
Documenting the revised plan
Write down the revised plan: what changed, what you are doing, the new timeline with a buffer, the evidence and the backup. Share it with your lender. A clear written plan turns a worrying delay into a managed process.
Mistakes to avoid
- waiting until the maturity date to raise the problem
- replacing one optimistic timeline with another
- refusing to adjust price while interest accumulates
- taking on a new loan without a credible exit
- ignoring other debts, such as tax, that may compound the pressure
Preventing the next slip
For future borrowing, build a buffer into the term from the start, plan a backup exit before you need it, and track the exit’s progress monthly. Our guide to exit strategies lenders accept explains how to set a resilient plan from day one.
Talking to other stakeholders
A slipping exit often affects more people than the lender. Your accountant may need to update forecasts. A business partner or spouse who provided security should be told. Suppliers or the ATO may be relying on dates you gave them. Keeping everyone informed, with realistic new dates, avoids a second wave of problems. Where a guarantor is involved, telling them early is not just courteous; it gives them time to plan for the possibility that they may need to help.
The cost of waiting versus acting
It is tempting to wait a few more weeks in the hope that the original exit will come good. Sometimes it does. But each month of delay adds interest and can narrow your options if values or circumstances change. Set a decision date: if the original exit has not progressed by then, the plan B begins. That simple discipline prevents months of drift.
Turning a delay into a plan
A late exit is a problem to solve, not a crisis to fear. Tell us the loan, the original exit, what has changed and the options you are considering, and a specialist will help you build a credible plan B. There is no credit check when you first enquire, your details remain within one team, and an honest picture of the delay helps us recommend the most cost-effective path. Get help with your exit.
Frequently asked questions
Will my lender extend if the exit is late?
The loans we arrange are flexible and can stay in place longer if needed. Raising it early, with a credible revised plan, makes an extension straightforward.
What if the property sells for less than expected?
Check whether net proceeds still cover the balance. If not, plan how to repay the difference, for example from another asset or a refinance of the remainder.
Should I refinance to another private lender?
Sometimes, if your current lender cannot extend or another lender offers better terms. Compare total costs carefully.
How long should a plan B take?
As long as it realistically needs, with a buffer. Avoid replacing one optimistic timeline with another.
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