Understanding restructuring
Shaun avatar
Written by Shaun
Updated over a week ago

When a financing is marked as 'restructured', it means that we've changed the previously agreed upon repayment schedule.

Why do we change the repayment schedule (restructure)?
If an SMEs circumstance changes and they have trouble making repayments, our Collections team may decide that our best chance to recover the funds is to restructure the repayments. Essentially this is an extension of the previous repayment deadlines.

Why not just take legal action to recover the funds?
Legal action is the right choice in some circumstances, however sometimes it actually may reduce our chance to recover the money. An example of where restructuring is preferred is when the business is still in operation and generating revenue. In this case we would prefer not to take legal action, as this could stop the businesses operations and any more revenue from coming in.

On top of this, it's common for SMEs to have debt with other creditors (including banks). If we were to force a liquidation of the companies assets, our debt could be junior (for our unsecured products), which means that in the event of liquidation, our debt is recovered last, and at that stage there may be very little or none left.

How can I see the new structure?
It's in the usual place you can see repayment dates in the portfolio. Just click the down arrow (V) on the left hand side of the financing in the list. 

Will there be extra late fees?
Any change to the fees will be communicated to investors in the notes on the portfolio.  

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