Case 1: Urgent Debt Resolution and Working Capital

Problem: "James ," a seller of tractors and light machinery, found himself ensnared by a spiraling, very expensive business loan from a very prolific business loan lender who operated without regulation and showed no mercy on defaults. He faced an immediate obligation of $220,000 to this lender, in addition to needing $30,000 for critical purchase orders to sustain his business, and anticipating a $15,000 ATO debt. His home, valued at $420,000, represented a significant, yet illiquid, equity source.

Solution: FoS swiftly intervened, engaging directly with the aggressive lender and securing a 7-day payout letter. Crucially, FoS then facilitated the necessary capital approximately $220-230k to pay out the urgent business lender and provide the vital working capital for his purchase orders. This direct intervention cleared the runway and provided essential time and control over the situation. This element of control is a critical, yet often overlooked, benefit in highly distressed situations.

It encompasses managing aggressive creditors, ensuring strict deadlines are met, and meticulously guiding the client through complex refinance processes without the risk of further defaults.

This proves that for businesses in acute distress, our expert management of the crisis by our experienced team is as valuable, if not more so, than the capital itself, preventing a further spiral into unrecoverable debt. FoS subsequently managed the refinance process to a more sustainable non-bank lender, leveraging James 's residential property as security.

Key Takeaway: This case powerfully illustrates FoS's unique capability to act as an immediate, controlling bridge lender in high-stakes, time-sensitive situations. It demonstrates how direct intervention can prevent catastrophic defaults, provide essential working capital, and facilitate a structured transition to a more sustainable, less expensive long-term solution, ultimately being "far far less expensive for him doing it that way" than alternative distressed finance options.

Case 2: Supporting Formal Business Restructuring (SBR)

Problem: The owner of a Furniture Removal business faced a "huge tax bill" and a Director Penalty Notice (DPN) of $600,000, with a tight "21 days" deadline for resolution. This crisis was triggered by long-term bookkeeper errors. The business needed immediate capital to fund its Small Business Restructuring (SBR) proposal, which required an upfront payment to creditors.

Solution: Working in close collaboration with an SBR practitioner, FoS comprehensively assessed the situation. Despite the business property already being at a high 75% Loan-to-Value Ratio (LTV), FoS identified a non-bank lender willing to extend finance up to an 85% LTV with just an accountant's certification.

FoS facilitated the expedited valuation process, even covering the initial cost, and swiftly lodged and settled the loan within the critical 21-day timeframe, providing the necessary capital to meet the SBR proposal's requirements. The case explicitly states that while the SBR practitioner had initiated negotiations, capital was critically needed to "settle and meet the requirements" of the proposal.

This demonstrates that formal insolvency processes, while providing a legal and structural framework for recovery, often require external financial injections to be successful and effective. FoS's role here is not just that of a lending agent but a crucial enabler of the SBR process itself. This suggests a critical partnership between our insolvency experts and specialised finance providers, forming a collaborative ecosystem essential for successful business rehabilitation.

Key Takeaway: This case powerfully highlights FoS's specialised expertise in navigating formal insolvency processes like SBR. It demonstrates our ability to secure flexible finance from non-bank lenders who are comfortable with higher LVRs and the unique circumstances of SBR situations, thereby enabling businesses to successfully fulfill their restructuring proposals and return to operational viability. The added benefit of having an option to reduce the interest rate later, once the LVR drops, showcases a strategic, long-term view even within a short-term crisis.

Case 3: Proactive Debt Consolidation and Cash Flow Improvement

Problem: A Café owner in Gold Coast Queensland was severely burdened by eight different business loans, resulting in crippling monthly outgoings of somewhere around $9,500. This cash flow strain was identified early by her accountant, before any formal restructuring idea had been considered, highlighting a proactive approach to financial health.

Solution: FoS identified an investment property the owner had held for 10 years, which had accumulated significant equity due to the Australian property market. We strategically leveraged this equity with a non-bank lender for business use, securing a favourable 7% interest-only rate. This allowed her to consolidate and pay out all the high-cost, multiple business loans.

This case highlights that distressed finance is not solely a tool for crisis management; it can be a vital instrument for proactive financial optimisation and preventative care.

Tapping into dormant personal property equity to consolidate expensive, unsecured business debts can fundamentally transform a business's cash flow and long-term stability, effectively preventing distress before it escalates into a full-blown crisis.

We often suggest to accountants and financial advisors that they should routinely review their clients' personal assets for potential strategic business use, even when formal distress is not imminent, as a key component of holistic financial planning.

Key Takeaway: This is a powerful example of proactive intervention and the immense benefits of early engagement. By consolidating multiple high-interest, short-term business loans into a single, lower-rate, property-backed loan, FoS dramatically improved the client's cash flow, reducing monthly outgoings from $9,500 to approximately $1,300. This critical intervention allowed the business to "trade onwards and afterwards" and successfully averted the need for a formal insolvency process.

Case 4: Financing Niche Assets in Distress

Problem: A business faced a bank loan that was in default, with its security comprising five moorings and five houseboats on the Darling River. This represented a very niche security valued at approximately $3 million, yet it was exceptionally difficult to get finance against those things because they are operational" and carried a massive liability of loss.

Solution: FoS's core role was to leverage its extensive network and expertise to identify "the right finance partner" specifically capable of understanding and accepting such unconventional collateral.

Our specialised lender was able to release equity from those moorings and from those houseboats to pay off the defaulted loan and address other related financial obligations. While residential or commercial property equity is a common and straightforward solution for distressed finance, this case demonstrates that highly specialised lenders, accessible through our expert brokers, can find value in highly niche, operational assets.

It is to be noted that businesses should not immediately dismiss their non-traditional or specialised assets as potential security in times of distress, and our expert FoS brokers are key to unlocking this hidden value.

This broadens the scope of what constitutes viable collateral in distressed lending, moving beyond the conventional and opening up new avenues for businesses with unique asset portfolios.

Key Takeaway: This case profoundly underscores the principle that "there's always options", even for highly unconventional or specialized assets that traditional lenders would typically reject. It powerfully demonstrates the value of a specialised broker's deep network and unique expertise in finding bespoke financial solutions beyond conventional property-backed lending.

Crucially, it also reinforces FoS's overarching ethical stance of: "our job is to rigorously diagnose... does this make commercial sense for you to proceed with this option?", advising against a loan if it is not truly commercially viable for the client, even if obtaining the funds is technically possible.