There many different ways in which companies, businesses or individuals can raise finance, make loans and secure those loans.
If a company is involved, then the fundraising provisions of the Corporations Act are likely to be involved and if the loan is to an individual, then the consumer credit legislation is likely to apply.
If a loan has been made then it should be secured by a mortgage over real property and/or security over a business. There are particular requirements under legislation for taking these securities and enforcing them if the loan terms are not met.
Additional complications can arise if the borrower (being a person) becomes bankrupt or being a company is placed into administration. This may affect the lender’s ability to recover the loan even if the lender took what it thought was a legitimate mortgage or other security.
This is an extremely complex area and fraught with pitfalls. You should consult our experts in the field to make sure things are done properly from the start and throughout any enforcement process.
Feel free to contact one of our Finance, Loans and Securities Team Members for advice and guidance.