Can't make a business loan repayment? Call your lender before you miss it

The call nobody wants to make

You can see it coming. A slow month, a customer who hasn’t paid, a tax bill that landed at the wrong time, and the loan repayment due next week looks impossible. The instinct is to wait: maybe the money will come in, maybe the lender won’t notice if it’s a few days late.

That instinct is understandable, and it’s usually the most expensive option. Once a repayment is missed, you’re dealing with arrears, possible fees and, eventually, the risk of a default being reported. Before it’s missed, you’re simply a customer asking for help, and lenders generally have more room to move.

What the Banking Code says

Most Australian banks subscribe to the Banking Code of Practice. The current version, the 2025 Code, became effective on 28 February 2025, and it covers small business customers. On financial difficulty, it’s direct: if you’re experiencing financial difficulty, you or your representative should contact the bank as soon as possible. The Code notes that the sooner you contact them, the sooner they can try to help.

The Code defines financial difficulty broadly. It includes being unable to repay what you owe, expecting to be unable to pay upcoming repayments, or having difficulty meeting your repayment obligations. You don’t have to have missed a payment to ask.

Options listed in the Code include:

• agreeing to interest-only payments for a short period
• extending the term of the loan to reduce repayments
• temporarily postponing or deferring payments
• giving time to sell property
• referring you to financial counsellors or advisers

None of these are automatic. They depend on your circumstances and the bank’s assessment. But none of them are available if you don’t ask.

Non-bank lenders aren’t all covered by the Banking Code, but most have hardship or financial difficulty processes of their own. The same principle applies: call early.

Before you call: three things to know

A lender can only help with a plan if you give them one. Before you ring, work out:

1. What’s happened. In a sentence or two. “A major customer went into administration owing us $70k.” “Winter trade was down about a third on last year.” “An unexpected ATO bill took our buffer.”
2. What you can pay now. Full repayment? Half? Interest only? Nothing for a month?
3. When things should improve, and why. A contract payment due in six weeks, the busy season starting in November, a property sale settling in March.

If you’re not sure about the numbers, a simple cash flow statement for the next three months helps enormously. business.gov.au has templates and practical ideas in its cash flow section.

What to say on the call

Ask for the hardship or financial difficulty team if there is one. Then:

“I’m calling about our business loan, account ending 4471. I want to be upfront: I don’t think we can make the full repayment due on the 18th. A major customer went into administration last month owing us about $70k. I can pay about half this month. We’ve got a contract starting in November that should get us back on track by December. I’d like to talk about options, such as interest-only for a couple of months.”

Illustrative example only.

Notice what that does: it’s early, it’s specific, and it proposes a plan. A lender can work with that.

During the call

• Write down who you spoke to, the date, and what was agreed.
• Ask what happens next and whether anything will be reported to credit bureaus.
• Ask for any arrangement in writing.
• Don’t agree to something you can’t meet. A plan that fails in a month is worse than a slightly longer conversation now.

Our list of questions to ask a lender on the phone covers the key ones, including costs and what happens if plans change.

If there’s more than one lender

Many businesses have several facilities: a bank loan, equipment finance, a card, perhaps an online loan with daily repayments. When cash is tight, list them all with balance, repayment and status. Our page on describing existing debts shows how. It often becomes clear that one facility is doing most of the damage, frequently a short-term daily or weekly repayment product, and that’s where attention should go first.

Don’t forget the ATO. If tax debt is part of the picture, businesses owing $200,000 or less can usually set up a payment plan online. See our page on owing the ATO.

Free, independent help

You don’t have to work this out alone. The Small Business Debt Helpline (1800 413 828) is a free service for small business owners in financial difficulty. Qualified financial counsellors give free, independent and confidential advice. It’s staffed from 9am to 5:30pm Monday to Friday, and many owners find a conversation with them useful before or after speaking to their lender.

State small business commissioners can also help where a dispute, for example with a landlord or customer, is part of the cause.

If the lender won’t engage

Most lenders will talk. If yours won’t, or you think you’ve been treated unfairly:

1. Use the lender’s internal complaints process first. The Australian Financial Complaints Authority recommends raising concerns with the financial firm first so it can try to resolve them.
2. Contact AFCA if that doesn’t work. AFCA independently assists consumers and small businesses with complaints about member financial firms, and its service is free.

When restructuring makes sense

Sometimes the honest answer is that the current repayments don’t fit the business any more. Refinancing or consolidating, for example replacing several short-term debts with one longer-term facility, can bring repayments back to a level the business can carry. It isn’t right for everyone. Compare the total cost, the exit costs on existing loans, and any security involved.

If that’s a conversation you’d like to have, you can see what your business might qualify for without a credit check at the enquiry stage. Be upfront about any arrears; our page on explaining past credit problems shows how.

What to say to your team, suppliers and landlord

Cash-flow pressure rarely affects just one creditor. While you’re talking to your lender, think about the other people who need to hear from you:

• Suppliers. A short, honest call asking for a little more time on one invoice, with a date you can meet, often keeps an account open when silence would get it stopped.
• Your landlord. If rent will be late, say so before the due date and propose a plan. State small business commissioners can help with lease disputes if things become difficult.
• Your staff. Wages and super should be protected first wherever possible. From 1 July 2026, Payday Super means super must reach employees’ funds within seven business days of payday, so build that into your cash plan.
• Your accountant. They can help you prioritise, check what’s owing to the ATO, and prepare figures for your lender.

The principle is the same everywhere: early, honest contact with a realistic plan keeps options open. It’s also worth chasing anything you’re owed with the same urgency; our guide on chasing unpaid invoices by phone has scripts that work.

A quick checklist

• Work out what happened, what you can pay, and when it improves
• Call before the due date and ask for the financial difficulty team
• Propose a specific plan
• Get any arrangement in writing
• List all debts, including the ATO
• Consider free counselling from the Small Business Debt Helpline
• Look at restructuring if the repayments no longer fit

Talk to someone today

The earlier the call, the more options you keep. Ring your lender first. If you’d then like a second opinion on restructuring or refinancing, call us on 03 4059 1829 or leave a 60-second enquiry. There’s no credit check to enquire, your details aren’t passed around a crowd of lenders, and a real specialist looks at the whole picture with you. Please be accurate about arrears and existing debts, so any option we suggest genuinely helps.