Statutory Demand and Winding-Up Finance

The exact dates for your matter depend on when and how the demand was served, and only your lawyer can confirm them. The shape below is what the twenty-one days generally looks like from a funding point of view.

The pattern we see most often is a director who spends the first ten days hoping the creditor will negotiate, then arrives with eleven days left asking for a mortgage refinance. Eleven days is not a mortgage. It might still be a private facility, at a price.

If the company fails to comply with the demand and has not applied to set it aside within the period, the law presumes the company is insolvent. The creditor can then apply to wind it up, and the company carries the burden of proving solvency rather than the creditor proving insolvency.

That reversal is the whole reason a statutory demand is taken seriously. It converts a commercial dispute into a solvency question, and it does so on a fixed date, whether or not anyone at the company was paying attention.

Your lawyer will frame this properly for your matter. In plain terms, there are three directions.

Pay or secure the debt

The cleanest answer where the debt is genuinely owed. Payment within the period ends the demand. This is where finance does its work, and it is the option most often chosen once directors price the alternative.

Apply to set the demand aside

A court can set a demand aside where there is a genuine dispute about the debt, where there is an offsetting claim, or on other defined grounds. This must be filed within the period. It is a legal process with its own costs, and it is not a delay tactic that works on its own.

Deal with the solvency question directly

Voluntary administration, small business restructuring or liquidation. Sometimes this is the honest answer, and a registered practitioner is the person to say so. We would rather tell you that early than arrange funding that only moves the date.

We are a finance and mortgage brokerage. We do not act in the proceedings, we do not advise on the demand, and we are not insolvency practitioners. We work on one question: can the money be raised inside the window, and at what cost.

1. 01

   Establish the deadline and the amount

   The date of service, the amount demanded, and whether there are other demands, judgments or garnishees running behind it. One number is a funding job. Five is a restructuring conversation.

2. 02

   Identify security in an hour, not a week

   Property held personally or by the company, commercial premises, plant, receivables. Titles, rates notices and existing mortgage statements. This is the fastest thing you can do to help yourself.

3. 03

   Match speed to the deadline

   Bank timeframes rarely fit a statutory period. Private lenders, caveat facilities and second mortgages exist for exactly this, and they cost more because they move faster and take more risk.

4. 04

   Get terms in writing early

   An indicative term sheet lets your lawyer tell the creditor something concrete. Creditors behave differently when there is a funded proposal rather than a promise.

5. 05

   Settle and pay the creditor

   Funds directed to the creditor or its solicitor, with evidence of payment produced the same day.

6. 06

   Refinance the expensive money out

   A short-term facility should have a planned exit from the day it settles, usually into a longer-term secured loan once the pressure is off. We plan that at the start, not at the end.

Everything below is a structure, not a product, and none of it is available to everyone. Availability, cost and timing depend on the lender, the security and the file. We do not quote rates on this site.

The right answer is often two of these in sequence: the fast one to meet the deadline, then the cheap one to replace it. Paying a high rate for three weeks to protect a solvent business is a rational trade. Paying it for three years is not, which is why the exit is designed first.

Speed comes from documents, not from urgency. Directors who send this list on day one are the ones who settle in time.

• The demand itself, including the affidavit and the date and method of service
• Details of any other demands, judgments, garnishees or defaults
• Titles, rates notices and current mortgage statements for every property
• Last two years of financials and the current interim profit and loss
• Six months of business bank statements
• ATO integrated client account statement, including super
• Aged debtors and creditors, and any contracts that will pay out soon
• Your solicitor's name and contact details, so we can work alongside them

We will deal with the lenders.

A statutory demand is one of the few situations where the cost of the wrong adviser is measured in days. You need three roles covered, and they are not the same role.