Quick answer: First establish whether the sales decline is temporary and whether the core business remains cash-profitable. Then quantify all debt, asset sale values and the break-even. Refinancing can reduce repayment pressure, but extending debt against obsolete or surplus assets can postpone rather than solve the problem.
Questions business owners commonly ask
- Sales fell 25% but equipment and bank repayments are still huge — where do I start?
- I have financed equipment I no longer need and cannot sell quickly. Should I refinance it?
- My next BAS is looming while debt service is already too high.
Build the post-decline break-even
Use current sales, current gross margin and current fixed costs — not the peak-sales budget that justified the old debt.
List every facility and asset
Record payout, rate, repayment, remaining term, security and realistic sale value. Surplus equipment may be a liquidity source even if sold at a loss.
Refinance only if the new structure is viable
A longer term can create breathing room if the core business can recover and debt still amortises. It is dangerous if sales no longer support the business.
Protect tax and essential trading
Do not let a refinance merely free cash for discretionary spending while BAS, PAYG and essential suppliers deteriorate.
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General information only. Business lending policy, security, guarantees, pricing, covenants and documentation vary by lender and transaction. This is not legal, tax or accounting advice.
Frequently asked questions
Should I refinance equipment debt into one loan?
Potentially, if security and lender policy allow and total cash flow improves.
Should I sell equipment at a loss?
Compare the sale loss against continued debt service and whether the asset is needed.
Can working-capital finance solve lower sales?
Not if the core operation is structurally loss-making.
What if BAS is due too?
Include tax obligations in the full restructure.
When should I seek restructuring advice?
When the business cannot meet debts as they fall due or viability is uncertain.
Sources and verification
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