Commercial Lending & Refinancing

Commercial Loan Structuring & Facility Documentation

We advise on the structuring of commercial loan facilities to meet the specific needs of each transaction, taking into account the nature of the borrower's business, the purpose of the facility, the security available, and the regulatory environment in which the lender operates. For each transaction, we consider the most appropriate facility structure by reference to the borrower's cash flow profile, capital requirements, and growth trajectory, and we advise on the mix of facility types that will provide the borrower with the flexibility it needs while ensuring that the lender's risk is appropriately managed. Our facility documentation covers all standard commercial lending products. Term loans are documented with clearly defined repayment schedules, interest rate arrangements, and prepayment provisions. Overdraft facilities are structured as fluctuating facilities with periodic review and renewal mechanisms. Commercial bills and bill acceptance facilities are documented with the necessary authorities, indemnities, and security arrangements. Revolving credit facilities include drawdown mechanisms, borrowing base certificates where applicable, and review and renewal provisions. We also document construction loans with detailed drawdown mechanisms tied to progress milestones, building surveyor certifications, and evidence of compliance with development approvals and building contracts.

Refinancing Transactions & Debt Consolidation

Our refinancing practice is one of the most active areas of our commercial lending work, and we act on a large volume of refinancing transactions annually across a wide range of industry sectors and transaction sizes. We advise borrowers seeking to refinance existing debt facilities for a variety of reasons, including to obtain more favourable pricing or terms, to consolidate multiple facilities into a single arrangement for administrative convenience, to release equity or obtain additional funding, or to restructure existing arrangements following a change in the borrower's circumstances or business strategy. For each refinancing transaction, we conduct a thorough review of the existing facility documents to identify any restrictions on prepayment or refinancing, including break costs, prepayment penalties, yield maintenance provisions, and notice requirements. We advise borrowers on the financial and legal implications of early repayment and negotiate with existing lenders to minimise the costs of refinancing where possible. We coordinate the discharge of existing securities and the registration of new securities, managing the interaction between outgoing and incoming security arrangements to ensure that at no point is the incoming lender unsecured.

Due Diligence & Lender Risk Assessment

Comprehensive due diligence is fundamental to informed lending decisions, and our practice includes a well-developed capability for conducting legal due diligence on behalf of lenders across all types of commercial lending transactions. Our due diligence process is tailored to the nature and risk profile of each transaction and typically includes corporate due diligence, including verification of the borrower's legal structure, constitutional documents, ownership, and corporate standing; property due diligence, including land title searches, survey identification, and review of leases, licences, and property-related agreements; securities due diligence, including PPSR searches to identify existing security interests, priority searches, and review of existing security documentation; litigation due diligence, including court searches to identify existing or threatened proceedings affecting the borrower or its assets; and regulatory due diligence, including review of the borrower's licences, permits, and regulatory compliance status. We prepare comprehensive due diligence reports for lenders that identify the key legal risks associated with the proposed transaction and recommend appropriate risk mitigation measures including conditions precedent, warranty protections, and security requirements.

Regulatory Compliance & Responsible Lending

Commercial lending in Australia is subject to a complex regulatory framework that encompasses the National Consumer Credit Protection Act 2009, the Corporations Act 2001, the Australian Securities and Investments Commission Act 2001, and the regulatory guidance issued by ASIC, APRA, and the Australian Financial Complaints Authority. We advise lenders on their compliance obligations across this regulatory framework, with particular emphasis on the responsible lending obligations under the NCCP Act where they apply to loans that are subject to the credit legislation. While many commercial loans are exempt from the NCCP Act, where small business loans or other regulated credit arrangements are involved, compliance with the responsible lending obligations is critical. We advise lenders on the application of the NCCP Act exemption provisions, the responsible lending obligations, and the documentation required to demonstrate compliance. We also advise on the Australian Credit Licence requirements under the NCCP Act, including the licensing obligations for lenders and the circumstances in which an exemption from the licensing requirements may be available.

Commercial Lending & Refinancing FAQs (Queensland Law)