(07) 5644 3500
logo
Cigno Business Solutions
logo
  • Calculate Your Loan
  • Apply Now
  • How It Works
  • Blog
  • FAQs
  • Who Are We?
  • Contact
  • Login
Review Management What Is It - Cigno Business Solutions Australia 0
Review Management: What Is It?
21 February 2020
B2B Business Disputes What Are Your Rights And Options - Cigno Business Solutions Australia 0
B2B Business Disputes: What Are Your Rights And Options?
05 March 2020
Unsecured Business Loans
Unsecured and Secured Creditors: What Are The Differences?
Unsecured and Secured Creditors What Are The Differences - Cigno Business Solutions Australia
Photo by Erik Mclean on Unsplash

Who’s a creditor?

If a company owes you money, you are a creditor of that company.

An employee is a creditor if owed money for unpaid wages and other entitlements. Creditors owed money if they’ve provided goods or services, or made loans to the company.

A person is also a creditor (contingent) in a certain circumstance — if he or she succeeds in a legal claim against a company.

In general, there are 2 categories of creditor:

  • Secured creditor — a person who has a security interest in the company’s assets. It is to secure a debt owed by the company.
  • Unsecured creditor — a person who does not have a security interest in the company’s assets.

When lenders provide a loan, they usually require a security interest in company assets. A security interest can take the form of a mortgage or charge.

If a company is insolvent, being a secured or unsecured creditor is important. It’ll determine your priority in receiving payment, as well as your rights and obligations in company affairs.

Voluntary Administration

During voluntary administration, a company tries to improve the way business is run to continue business activity in the long run. Voluntary administration is also to administer company affairs for creditors to receive a more optimal return, if insolvency is inevitable.

The outcome of voluntary administration can either be:

  • reinstatement of control of directors;
  • closing the company down, and appointment of an individual to liquidate assets; or
  • creation of deed of company arrangement — outlining the repayment of debts.

Both secured and unsecured creditor rights are limited during voluntary administration. However, there are 2 meetings where creditors can partake:

  1. Creditors can vote on the replacement of the administrator, and the creation of a creditors’ committee.
  2. Creditors can vote on the future of the company. The creditor can determine what to pursue among the 3 outcomes after reviewing the voluntary administrator’s reports.

Creditors have to lodge details of their debt and claims directly with the voluntary administrator in order to vote in these meetings.

Receivership

If a company is not able to fulfill its obligations regarding a security interest, a secured creditor has certain rights.

Say, the company can appoint a receiver, whose role is to secure some or all of the company assets to repay the creditor’s debt. Any assets to be sold must be sold at the best price obtainable or the market value.

In receivership, the receiver’s prime obligations are due to the secured creditor.

It also means the receiver is not obliged to report to unsecured creditors, either in writing or in a formal meeting. Although, an unsecured creditor can apply to the court to wind up the company during a receivership.

Liquidation

The winding up of the company is referred to as liquidation. Following voluntary administration or through a shareholder resolution, creditors can decide to go into liquidation. A liquidator takes control of company affairs for all the creditors’ benefit.

Either through a court order or creditors’ decision, both secured and unsecured creditors can initiate this process.

During liquidation, both creditors have the following rights & responsibilities:

Secured creditors:

  • vote at creditors’ meetings, and receive dividend payments;
  • appoint a receiver to take control of secured assets for debt repayment;
  • on their behalf, request the liquidator to deal with the secured assets.

Unsecured creditors:

  • lodge debt or claim details with the liquidator, in a Proof of Debt form;
  • once the ‘Proof of Debt’ form is approved, vote at a creditors’ meeting;
  • approval of liquidator’s fees;
  • request the liquidator to recover unfair preferences;
  • inform the liquidator about company affairs;
  • receive information from the liquidator — through access to reports or a creditors’ meeting;
  • enquire about the liquidation process and status;
  • receive dividends after repayment of priority creditors; and
  • lodge complaints to ASIC, or the court — about the execution of the liquidator’s duties.

Cigno Business Solutions - Business Loans in Australia

Unsecured business loans in Australia

Cigno Business Solutions understands that business is personal and do all they can to be accommodating to all applicants.

Unsecured business loans are great for business owners who:

  • need the funds urgently;
  • don’t like the idea of offering up security;
  • don’t own any assets that can serve as collateral;
  • want to do the process online.

With unsecured business loans from CBS, your credit rating isn’t part of the assessment for approval.

What you’ll need to apply are some contact details, a 90-day bank statement for your business, and a registered ABN.

Once your application has been approved, you will receive funds within 2 hours.

Pretty easy, right? Apply now!

 

0 Comments
  • unsecured business loan online
  • unsecured business loans
  • unsecured business loans Australia
0 Like!
Share
Cigno Business Solutions

Leave a reply

Click here to cancel reply.

Categories

  • ABN Loans — No Credit Check (5)
  • Business Grants (2)
  • Business Loans Australia (10)
  • Cash Flow Business Loans (6)
  • Fast Business Loans (10)
  • Instant Business Loans (8)
  • Online Business (1)
  • Short-Term Business Loans (6)
  • Small Business loans (11)
  • Startup Business Loans (14)
  • Uncategorized (4)
  • Unsecured Business Loans (10)
Cigno Business Solutions, Apply Now

CIGNO BUSINESS SOLUTIONS

Who Are We?
How It Works
Apply Now
Blog

HELP

Calculate Your Loan
FAQs
Contact

LEGAL

Privacy & Credit
Responsible Lending Criteria
Feedback

PRODUCT

Small Business Loans
Unsecured Business Loans
Short-Term Business Loans
Types of Business Loans
Start-Up Loans
ABN Loans — No Credit Check
Fast Business Loans
Personal Loans for ABN Holders
Instant Cash Loans
Cash Flow Loans for Small Businesses

© Cigno Business Solutions 2018. All rights reserved. ABN 43 612 373 734.

Address: PO Box 3578, Australia Fair, Southport, QLD, 4215

logo