Behind on a business loan repayment? Which call to make first, and what to say

When a business loan repayment is about to bounce, the instinct is often to go quiet and hope the next week is better. It’s an understandable instinct, and it’s usually the most expensive one. The order in which you make your phone calls matters — and the first call is rarely the one people expect.

Which call should I make first?

Your existing lender. Before the repayment is missed, if you possibly can.

It feels counter-intuitive. Why ring the people you owe money to and tell them you’re struggling? Because they have options that disappear once a loan is in default, and because hearing from you first changes the tone of everything that follows. business.gov.au’s guidance on managing debt says speaking to creditors early can prevent late penalties and collection action, and suggests asking about hardship provisions, extended payment dates or payment arrangements.

A lender who hears “we’ve had a customer pay late, we’ll be short for about six weeks, here’s what we can pay in the meantime” has something to work with. A lender who hears nothing until three repayments have bounced has a default to manage.

What should I say to my lender?

Keep it short, honest and specific. Cover four things:

1. What’s happened. A late-paying customer, a slow season, a large unexpected cost, a health issue.
2. How long it’s likely to last. Weeks, a couple of months, or unclear.
3. What you can pay in the meantime. Even a partial payment shows good faith.
4. What you’re asking for. A short pause, reduced repayments, interest-only for a period, or a longer term.

Before the call, spend fifteen minutes with your bank statements and a simple forecast of the next couple of months. business.gov.au suggests preparing financial statements — a profit and loss or a cash flow forecast — before discussing hardship options with your lender. It makes your request far more credible.

What should I ask for — and what should I confirm?

Ask what’s available, and what each option costs:

Option	What it does	What to ask
Short repayment pause	Stops repayments for a set period	Does interest keep accruing? How is it repaid later?
Reduced repayments	Lowers repayments temporarily	For how long? What happens to the shortfall?
Interest-only period	Pays interest but not principal	What does the loan look like when it ends?
Term extension	Spreads the balance over longer	What’s the total cost in dollars over the new term?

Then confirm any arrangement in writing: what’s been agreed, for how long, what it costs, and how it will be reported. Our guide on what to write down after a finance call has a template that works here too.

If you’d like to talk the situation through with someone independent of your current lender, you can request a call-back here.

Which calls come next?

Once your lender knows, work through the rest in order of consequence:

• The ATO, if a BAS or tax payment will also be late. The ATO advises contacting it before the due date, and businesses owing $200,000 or less can set up a payment plan themselves online. Our ATO debt call prep covers what to have ready.
• Staff pay, PAYG and super — protect these above almost everything else. Unpaid PAYG withholding and super guarantee charge can become directors’ personal liabilities.
• Key suppliers, particularly those you need to keep trading.
• Your accountant, for a view on the bigger picture.

When does refinancing make sense?

A hardship arrangement is the right tool for a temporary dip. It isn’t the right tool when the loan itself is the problem. Signs it may be time for a refinance conversation:

• The repayments were always too high for the business’s normal cash flow.
• A short-term loan is ending and there’s no clear exit.
• Several debts together — loans, merchant advances, cards, the ATO — have become unmanageable, even if each looks fine alone.
• An expensive facility is eating the margin that should be repaying it.

In those cases, restructuring the debt — fewer facilities, a longer term, security that fits — can be more sustainable than a temporary arrangement. Our refinance call prep explains the debt list and payout figures to prepare.

A word of caution: refinancing works best when it’s done before a loan falls badly into arrears. If you’re already behind, say so up front. It doesn’t automatically rule things out, but it changes which options fit and how they need to be structured. Our past credit issues call prep explains how to frame it.

What if my lender won’t work with me?

Most lenders would rather find an arrangement than chase a default, but not every conversation goes well. If you can’t reach agreement:

• Use the lender’s internal complaints process first, in writing.
• Check external options. ASIC’s guidance on disputes about commercial loans notes that the Australian Financial Complaints Authority can help small businesses where the lender is a member, but that lenders offering only commercial loans aren’t always required to be.
• Contact the Small Business Ombudsman. ASBFEO offers dispute support for disputes with financial institutions, among others.
• Get independent legal advice if the stakes are high.

Where can I get free help?

You don’t have to work through this alone. business.gov.au lists the free Small Business Debt Helpline, which offers phone and online chat support, and the ATO has support for businesses having trouble with tax payments. business.gov.au also lists mental health services available around the clock — financial stress is heavy, and it’s worth looking after yourself as well as the business.

A simple order of calls

Order	Who	Why
1	Your existing lender	More options before a missed payment
2	The ATO, if tax is affected	Engaging early avoids firmer action
3	Payroll priorities	Protect staff, PAYG and super
4	Key suppliers	Keep trading
5	Your accountant	The bigger picture
6	A refinance conversation, if the loan itself is the problem	A structure that fits

What should I prepare before ringing my lender?

Ten or fifteen minutes of preparation changes the tone of the call. Gather:

• Your loan details — account number, current balance, repayment amount and due date.
• Recent business bank statements, so you can speak to what’s actually coming in and going out.
• The cause, in two sentences. For example (illustrative): “Our largest customer is paying 45 days late on a $38,000 invoice. We expect payment by the end of next month.”
• What you can pay now. A partial repayment, even a small one, shows good faith.
• Your proposal. Four weeks of reduced repayments, a one-month pause, interest-only for a quarter — whatever genuinely fits the problem.
• A simple forecast of the next two or three months, showing when things return to normal.

Then make the call, take notes, and ask for any arrangement to be confirmed in writing. If the lender asks for documents, send them promptly — it keeps goodwill on your side.

It’s also worth being honest with yourself about the forecast. If you can’t see how things return to normal, that’s a sign the conversation may need to be about restructuring rather than a short pause, and possibly about getting independent advice.

How do I stop it happening again?

Once things settle, look at what caused the shortfall and whether it could recur. Common fixes include building a small cash buffer in good months, arranging a standby facility before it’s needed, spreading work across more customers, and checking that repayments line up with when money actually comes in. A loan whose repayment date falls the day before your biggest customer usually pays is a loan designed to cause stress; asking the lender to move the date can be a simple, lasting fix.

Ready for an independent conversation?

If a refinance or restructure might be part of the answer, one clear conversation will tell you quickly. Asking for a call-back with Loan Hotline carries no credit check, your details stay with one team instead of being sent around to other lenders, and the specialist reads your situation — including the hard parts — before ringing.

Please be accurate in the request about what you owe, any arrears, your state and any property you own. It’s how we match you properly on the first call. Pick a window and we’ll call you.