Exit strategies: the only question that matters in short-term lending
Every short-term facility is a bet on one event happening by one date. Testing that event properly is the whole of the broker's value, and optimism about it is the most expensive habit in commercial finance.
Short-dated money is not priced for the risk of the borrower. It is priced for the risk that the exit does not arrive. So the assessment a broker should run is the same one the lender runs: what repays this, when, and how certain is that.
The useful discipline is to grade the exit rather than accept it. A contracted event with a date is one thing; a plan that depends on a third party doing something they have not yet agreed to is another; a hope is a third. All three get described to a broker in the same confident tone.
Contracted and dated
An unconditional contract of sale, a settlement scheduled, a capital receipt under a signed agreement. Evidence exists and a date exists. This is the only category that should be treated as certain.
Approved and progressing
A refinance with formal approval, in documentation. Strong, but not finished — conditions can still bite, and the incoming lender's own timetable is not the borrower's.
Conditionally approved
An indication subject to valuation or further information. Frequently described as "approved". Worth verifying directly rather than taking as reported.
Marketed but unsold
A property on the market with interest. The date is unknown, and selling periods stretch in the exact conditions that also make refinancing harder.
Intended
"We'll refinance once the year's figures are in." Only credible if something identifiable will have changed by then — see why applications get declined.
Circular
The exit is another short-term facility. That is not an exit, it is a rollover with a new fee, and the position is worse each time.
Six checks, all of which can be done before an application, and all of which cost less than being wrong.
- Ask for the document. The contract, the approval letter, the signed lease. Descriptions are not evidence, and the difference is usually where the risk lives.
- Establish who controls the date. If the exit depends on a purchaser, a lender, a council or a tenant, the borrower does not control it and neither do you.
- Ask what has changed since the last refusal. Where the exit is a refinance, the same lenders that declined before will decline again unless something identifiable is different.
- Model the date moving. Not whether it might slip, but what happens when it does — cost, equity erosion, extension terms, and whether the lender will extend at all.
- Check the equity buffer against a realistic value. Not the owner's figure. What the asset realises in a reasonable selling period, less everything ranking ahead — see commercial valuations.
- Read the default and extension terms before signing. This is the part of the documentation that decides whether a slipped settlement is an inconvenience or a disaster, and it is the part most often skipped.
Where the answers do not hold up, the honest service is saying so. A facility written against a weak exit does not fail quietly.
Extensions are less automatic than they were. Some Australian real-estate credit funds gated redemptions across July and August 2026 (trade press, August 2026), and globally the largest semi-liquid private credit funds capped redemptions at their maximum in the first half of 2026 (ABF Journal / The Adviser, August 2026). A lender managing its own liquidity has less appetite to roll a facility that has run past its term.
At the same time business insolvencies sit at a ten-year high, with business exits up 37% in the second quarter year on year (ASIC insolvency statistics via ABC News, July 2026). Short-dated money against a weak exit is exactly the structure that turns a difficult period into a terminal one, which is an argument for testing harder rather than declining more.
Borrowers under time pressure hear scepticism as obstruction. The framing that works is arithmetic rather than opinion: here is what this costs if it runs to term, here is what it costs if the date moves by a month, here is what happens if it moves by three. Numbers do the persuading.
It also helps to separate the two questions people merge. Whether the facility can be obtained is a different question from whether it should be, and a broker who can answer both is worth more than one who only answers the first. Where the answer to the second is no, the alternatives are usually a smaller facility, a longer-dated structure, or a different transaction entirely — the map of what else exists is in types of business loans and commercial property finance.
We generate enquiries; we do not assess exits, arrange facilities or advise borrowers. Where a timing situation exists, it shows up in the amount, purpose, timeframe and the borrower's own notes on the enquiry.
Commercial finance leads and business loan leads are sold once, to one broker, never resold, delivered in real time. Pay per lead, no lock-in contracts, no setup fees, and the lead is an introduction, not a recommendation.