Finance During and After a Deed of Company Arrangement (DOCA)
Business Recovery
Voluntary administration · Deed contributions · Post-DOCA refinance
A deed of company arrangement is a deal to keep a company alive, not automatically the end of it. You may be here before the creditor vote, racing a deed deadline, trying to keep trading, worried about your home or personal guarantees, or looking to refinance after the deed is complete. This guide follows that whole director journey: what happens next, what finance can and cannot do, what a lender needs to see, and where the director's own exposure has to be understood first. It is written for company directors and business owners, not for creditors.
Quick Answer
A deed of company arrangement is usually funded from outside the company, not from its own cash, and it can give a viable business a path to keep trading. ASIC's July 2026 review found that 49% of businesses under a deed kept trading after it was executed, and that 63% of deeds involved third-party funding, which is broader than borrowed money. Where a deed contribution, a trading gap or an exit does need borrowing, the answer depends on the stage, the deed, current cash flow, available security, director exposure and a credible repayment plan. Specialist or private finance may be considered, but it is not automatic and should sit alongside insolvency and legal advice.
| Your question | Short answer |
|---|---|
| Can a company get finance during a DOCA? | Sometimes, and usually from specialist or private lenders, not a bank. The deed administrator's involvement and the security on offer drive what is possible. |
| How do directors fund a deed contribution? | Often from the director personally, through a second mortgage or private lending over property they own, rather than from the company itself. |
| Can you refinance after a DOCA? | Often, once the deed is completed and evidenced. A recent insolvency event may still sit outside some mainstream policies, so specialist and private lenders may be considered first. |
| Who controls the company in a DOCA? | The deed administrator makes sure the deed commitments are carried out. The directors' day-to-day role and the administrator's ongoing role depend on what the deed says. |
| Does a DOCA stop a director penalty notice? | No. Appointing an administrator can address a non-lockdown notice within 21 days, but a lockdown penalty is only cleared by paying it (ATO). |
| Does a personal guarantee survive a DOCA? | Yes. A DOCA does not stop a creditor who holds a director's personal guarantee from acting under it (ASIC). |
| Where should you start? | With a registered liquidator or insolvency adviser on the deed, and a broker on the finance, before a deadline forces the decision. |
What is a deed of company arrangement, in plain terms?
A deed of company arrangement, almost always shortened to DOCA, is a binding agreement between an insolvent company and its creditors about how the company's affairs will be dealt with. It is one of the outcomes of voluntary administration, and its usual purpose is to give creditors a better return than an immediate liquidation would, while giving the company a chance to keep trading. It is a Part 5.3A arrangement under the Corporations Act, and it is a deal, not a court order: creditors vote on a proposal, and if it passes, the deed sets the terms.
The reach of a deed is wide, which is the point of it. According to ASIC, a DOCA binds all unsecured creditors, even those who voted against the proposal, and it also binds owners and lessors of property and secured creditors who voted in favour, with the Court able to bind others in certain circumstances (ASIC, as at 7 May 2025). There is also a hard deadline built in: if creditors vote for a DOCA, the company must sign the deed within 15 business days of the creditors' meeting, unless the court allows longer, or the company automatically goes into liquidation with the voluntary administrator becoming the liquidator. This guide does not try to out-explain the regulator on the mechanics of a deed; it stays on the question no insolvency page really answers, which is how a company or its directors actually finance one, during and after. Where a deed is not the right tool and the company is wound up instead, the liquidation entry covers that path.
This is not a fringe manoeuvre, and there is now hard data behind it. In July 2026 ASIC published its first detailed review of how voluntary administrations and deeds actually play out (ASIC REP 836, covering 1 July 2021 to 30 June 2025), and the numbers show both that a deed is a normal restructuring tool and that funding one from outside the company is the rule, not the exception.
| What ASIC's 2026 review found | Figure |
|---|---|
| Voluntary administrations that became a deed of company arrangement | 44% (with 50% going to voluntary liquidation and 6% to court liquidation) |
| Deeds that involved third-party funding, money from outside the company | 63% |
| Deeds where the business kept trading after the deed was executed | 49% (a further 22% were a business or asset sale) |
| Finalised deeds that were wholly effectuated, completed on their terms | 81% |
| Larger appointments, over 10 million dollars in liabilities, that entered a deed | 48% |
| Smallest appointments, under 250,000 dollars in liabilities, that entered a deed | 15% |
Two numbers matter most here. ASIC found that 49% of businesses under DOCAs continued trading after the deed was executed, while 63% of deeds involved third-party funding. That shows outside funding is common, but third-party funding is not the same thing as borrowed finance: it can include money contributed by a director, related party, owner, buyer or other external source. This guide focuses on the situations where borrowing forms part of the deed contribution, trading support or later refinance. The same review also shows deeds skew toward larger, more complex companies, so if the business is small the more efficient path may be small business restructuring, covered in the next section.
How is a DOCA different from voluntary administration, liquidation and small business restructuring?
Four processes get run together in conversation, and they are not the same, which matters because each one changes who controls the company and whether finance is even possible. Voluntary administration is the short breathing space a DOCA usually emerges from. A DOCA is the deal that can follow it. Small business restructuring is a separate, newer process for smaller companies. Liquidation is the end of the road. The table sets them side by side on the things a director actually cares about.
| Process | Who controls the company | What it is for | What happens to the debts | Can it keep trading and raise finance |
|---|---|---|---|---|
| Voluntary administration | An external administrator takes control; the directors' powers are suspended | A short breathing space to work out the company's future | Frozen while creditors decide; enforcement is largely paused | Trades under the administrator; new finance is uncommon and needs the administrator's involvement |
| Deed of company arrangement | The deed administrator makes sure the deed commitments are carried out; the directors' role and the administrator's ongoing role are whatever the deed sets | A binding deal with creditors to pay some or all of the debt and, usually, keep the company alive | Compromised on the deed's terms; binds unsecured creditors even if they voted no (ASIC) | Usually keeps trading; finance is possible but specialist, and the security is often the director's own |
| Small business restructuring | The directors keep control, debtor in possession, with a restructuring practitioner's help | Eligible small companies, broadly those with liabilities not exceeding 1 million dollars, restructuring their debts (ASIC) | Compromised under an accepted restructuring plan | Keeps trading; a separate Part 5.3B process, not to be confused with a DOCA |
| Liquidation | A liquidator takes control to wind the company up | Ending the company and distributing what is left to creditors | Realised and distributed; the company ceases to exist at the end | Trading stops, bar a short sale of the business; this is the outcome finance is trying to avoid |
The reason it is worth getting this straight is that the finance answer is different in every column. Under administration, a lender deals with the administrator, not the directors. Under a DOCA, the directors are usually back in the room but the deed governs. Under small business restructuring, the directors stay in control the whole way through, and ASIC's 2026 review found smaller companies, those under 1 million dollars in liabilities, mostly go this way or into liquidation rather than into a deed. This guide focuses on the DOCA column, and on the finance that keeps a company in it rather than sliding into the last one.
Where are you in the DOCA timeline, and what should happen next?
The right finance answer depends first on the stage, because a director who is considering voluntary administration, a company waiting for the second creditors' meeting, a signed deed with a payment due, and a business that has already completed its deed are four different lending situations. The most useful first question is not "Which lender will approve this?" It is "What legal and commercial deadline are we working toward, who currently controls the decision, and what outcome must the money produce?"
You may have arrived here after an ATO escalation, a statutory demand, suppliers moving the business to cash on delivery, a bank decline, an administrator asking how a proposed contribution will be funded, or a short-term facility that now needs to be refinanced. Those are different search terms, but they often converge on the same decision: whether the underlying business is viable after the legacy debt is dealt with, and whether finance creates a real exit rather than only buying time.
| Stage | What is happening | The real finance question | Practical next step |
|---|---|---|---|
| Before voluntary administration | The company is under pressure but no administrator has been appointed | Is there a viable business to save, or would new debt only delay a problem that needs formal insolvency advice? | Speak with a registered liquidator or qualified insolvency practitioner and the accountant first. Finance should be assessed as part of a plan, not used as a substitute for deciding whether the company is insolvent. |
| In voluntary administration, before the second creditors' meeting | The administrator controls the company and investigates the options for creditors | Can a proposed contribution or trading plan be evidenced before creditors decide the company's future? | Obtain the proposed deed terms, the administrator's report when available, the exact amount and timing required, and a complete picture of security, guarantees and director exposure. |
| Creditors approved a DOCA, but it is not yet signed | The deed must generally be signed within 15 business days unless the court allows longer | Can every funding condition, valuation, consent and legal document be completed in time? | Run the deed, finance, valuation and legal workstreams together. Do not treat the deed deadline and the loan settlement as separate calendars. |
| The DOCA is running | The company and any contributors must meet the commitments and dates written into the deed | Is the need a deed payment, ordinary working capital, or a refinance of the facility that funded the contribution? | Separate those purposes, keep current trading evidence clean, and raise any likely missed milestone with the deed administrator before it becomes a material breach. |
| The DOCA is at risk of breach or termination | A payment, sale, refinance or other promised action may not occur on time | Can a genuine funding solution cure the problem, or does the deed need to be varied? | Tell the deed administrator immediately and obtain legal and insolvency advice. The deed may allow consequences, creditors may consider a variation, and termination can lead to liquidation. |
| The DOCA has been completed | The deed obligations have been fulfilled and the business is rebuilding outside the deed | How can the company evidence completion, replace short-term funding and widen its lender options over time? | Keep written evidence of completion, map any liabilities or guarantees that survived, rebuild current financial evidence, then refinance in a sequence the business can actually service. |
What else has to be stabilised around the finance?
A loan can fund a contribution, a trading gap or an exit, but it does not automatically repair the rest of the business. The director who treats finance as one workstream inside a broader recovery plan is in a stronger position than the director who expects settlement to solve every operational problem the next morning.
| Workstream | What the director needs to know | Why it affects the finance outcome |
|---|---|---|
| Deed compliance | Contribution dates, reporting duties, conditions, variations and what counts as a material breach | The loan has to fit the actual deed rather than a summary of it |
| Tax and lodgments | Current BAS, PAYG withholding, GST, super and any director penalty exposure | New arrears can undermine the recovery story and change the director's personal position |
| Suppliers, landlords and trade terms | Who will continue supply, who has moved to cash on delivery, what deposits are required and whether leases or key supply arrangements need attention | The cash-flow forecast is only real if the business can keep obtaining the inputs and premises it needs |
| Customers, contracts, licences and insurance | Whether key counterparties, project owners, licensing bodies, bond providers or insurers require notice, consent or updated information | A funded business still needs the contracts and permissions that generate the revenue used to repay the facility |
| Banking and payment rails | Which accounts, merchant facilities, direct debits, payroll systems and existing lender arrangements continue to operate | Settlement is not useful if the company cannot receive revenue, pay staff or operate its ordinary cash flow |
| Employees and current payroll | Whether current wages, super, leave obligations and key staff retention can be managed while the business trades through | The recovery plan depends on the people who deliver the work, and current obligations must be met |
| The director's personal balance sheet | Guarantees, mortgages, director penalties, personal debts, jointly owned property and the family's ability to absorb the worst case | The company may survive while the director becomes overexposed unless the personal side is modelled separately |
The stage also changes who has to be in the room. In voluntary administration, the administrator controls the company. Under a DOCA, the deed sets the company's commitments and the deed administrator's ongoing role. After completion, the finance discussion moves back toward current trading, security and repayment conduct, but the historical insolvency event does not disappear. That is why the same borrower can be unfinanceable at one stage and financeable at another without the underlying business changing overnight.
Who controls the company during a DOCA, and can it keep trading?
Who controls a company in a DOCA depends on the deed's terms. ASIC describes the deed administrator's role as making sure the company and any other contributors carry out their commitments, with the extent of the administrator's ongoing role set out in the deed. In the voluntary administration that comes first, the administrator controls the company and the directors' powers are largely suspended. Once the deed starts, the directors' day-to-day role and the administrator's continuing involvement are whatever the deed provides. The deed is therefore the first document any lender or broker needs to read.
Trading through is common under a DOCA, and it is often the whole point: the future income of the business may be what funds the return to creditors. ASIC's 2026 review puts a number on it, finding that 49% of the deeds it examined saw the business keep trading after the deed was executed, with a further 22% used to sell the business or its assets (REP 836). But trading under a deed means meeting the commitments and conditions written into that deed, which is why finance during this phase is a specialist conversation rather than a standard one. For directors who want to understand how the wider finance picture fits their business, the business owners finance hub is the general starting point, and the sections below get specific about the DOCA case.
Can a company borrow or raise finance while under a DOCA or voluntary administration?
Sometimes, but the framing changes completely from ordinary lending. During voluntary administration, the administrator controls the company, so any proposed funding has to be considered through that process. Under a DOCA, the deed's terms, the purpose of the money, the company's current cash flow, the security offered and the repayment exit determine what is possible. Mainstream lender appetite is often limited, so specialist, private or receivables-based funding may be considered, but approval is not automatic and the funding still has to solve a defined problem. One legal point works in a distressed borrower's favour here: since 1 July 2018, so-called ipso facto reforms stay certain contractual rights that a counterparty would otherwise trigger simply because the company entered administration or a deed, so an existing financier cannot always enforce purely on the insolvency event itself (Corporations Act 2001, ss 415D, 434J and 451E, at legislation.gov.au).
What a lender weighs during this phase is where its security would sit, whether the administrator or deed terms permit the proposed step, whether the company can meet new obligations as they arise, and whether there is a credible way the loan is repaid. Property owned by the company or a director may provide the security where there is enough equity and the required owners and existing secured parties are dealt with. Receivables may suit a different need. That leads straight into the next question of how directors fund a deed. The realistic options at this stage sit on the private lending and second mortgage pages, and none of it is bank-shaped.
How do directors fund a DOCA proposal or deed contribution?
The deed contribution is the money or property the proposal promises for creditors, and where it comes from is what makes a deed credible. It can come from future trading, a lump sum, an asset sale, a director or related-party contribution, a buyer, or borrowed money, and some proposals combine more than one source. ASIC found that 63% of deeds involved third-party funding (REP 836), but that category is broader than lending. Where the contribution is borrowed, the company itself may be difficult to fund because of the insolvency event and limited unencumbered assets. A director may instead consider raising money against property they own, through a second mortgage or private facility, then contributing those funds under the deed. Whether that is sensible depends on the business after the legacy debt, the director's maximum personal exposure and a credible exit, not merely on whether equity exists.
Deeds tend to take one of a few common shapes, and each is funded from a different place. Knowing which shape you are proposing tells you immediately where the money has to come from, and whether it is your conversation to have or the buyer's.
| Deed shape | What it is | Where the funding comes from |
|---|---|---|
| Contribution deed | The director or a related party pays a lump sum or instalments into a deed fund, and the company keeps trading | Usually the director's own money, often borrowed against their property through a second mortgage or private lending; this is the shape most of this guide is about |
| Sale deed | The business or its assets are sold and the proceeds are distributed to creditors | The buyer's funding, not the director's; closer to an acquisition than a rescue loan |
| Trading or compromise deed | Creditors accept a cents-in-the-dollar return, paid out of future trading over the life of the deed | The company's own future cash flow, sometimes supported by a working-capital or receivables facility while it trades through |
Should a director put personal property behind a DOCA?
Only where the underlying business has a credible future after the legacy debt is dealt with, the deed outcome is better than the realistic alternatives, the director understands the worst-case personal loss, and the exit does not depend on everything going perfectly. The fact that a property has equity answers only whether security may exist. It does not answer whether the director should risk it.
More defensible reasons to consider it
- The core business is viable and can meet new debts after the old debt is compromised
- The contribution buys a defined deed outcome with dates and obligations that can be met
- The director understands the total facility cost and the maximum property exposure
- The exit is evidenced by current cash flow, a realistic refinance or a credible sale
- The decision is made with independent insolvency and legal advice, not only finance advice
Warning signs that finance may only delay the problem
- The business is still losing cash before any deed contribution or new loan repayment
- The director's home is the only remaining asset and there is no believable exit
- Personal guarantees, director penalties or other personal debts have not been mapped
- A co-owner is uninformed, unwilling or being treated as a signature rather than a decision-maker
- The new loan only postpones an imminent missed payment without fixing why it will be missed
Funding a contribution this way is not a decision to take lightly, because it moves risk from the company onto the director's own property, and it should sit alongside advice from a registered liquidator on whether the deed is the right instrument at all. What it can do, used well, is turn an insolvent company with a viable core into one that survives, on terms creditors have accepted. The finance question and the insolvency question have to be answered together, which is the theme of the rest of this guide.
How can a company fund trading while the deed runs?
Keeping the doors open while a deed runs is often less about a single lump sum and more about cash flow, and there are levers for that which do not depend on the company's balance sheet history. Where a business invoices other businesses, its receivables can sometimes be funded as they are raised, which turns work already done into cash without new property security. It is a different tool from the property-secured funding that pays a deed contribution, and it fits a different job: closing the gap between doing the work and being paid for it while the company trades under the deed. The mechanics, and when receivables funding suits a business, are covered on the invoice finance page rather than repeated here.
Alongside receivables, general working capital facilities can play a role once a company is trading cleanly again, though during a deed they are harder to arrange and may be more realistic after the deed is satisfied. The point of naming these levers is that trading-through finance and deed-contribution finance are not the same conversation, and treating them as one is where directors get stuck.
A second distinction matters just as much: a DOCA deals with the debts and obligations defined by the deed. It is not a licence to let new wages, tax, rent, suppliers or loan payments fall behind. A lender considering trading-through funding will therefore ask whether the company can meet new obligations as they arise, not only whether the old debt has been compromised.
Can you refinance after the deed of company arrangement is satisfied?
The clearest finance opportunity often comes after the deed has been completed, because the lender can assess an evidenced outcome rather than a promise still in progress. A recent formal insolvency event may still sit outside some mainstream policies or require a higher level of credit review, so specialist commercial or private lenders may be the first realistic step. ASIC's 2026 review found that 81% of finalised DOCAs were wholly effectuated, meaning completed on their terms (REP 836). The sequence matters: obtain evidence that the deed obligations have been fulfilled, identify what liabilities and guarantees survived, show current trading and repayment capacity, then refinance into a structure the business can actually carry.
| Finance moment | What it funds | Who typically lends | Security | When it fits |
|---|---|---|---|---|
| Funding the deed contribution | The lump sum or instalments the directors promise creditors under the deed | Private lenders and specialist non-banks | Usually a second mortgage or caveat over the director's own property | Before or at the point the deed is proposed, to make the offer credible |
| Finance during the DOCA | Working capital to keep trading while the deed runs | Specialist non-banks and receivables funders, with the deed administrator's involvement | Receivables, or property where equity and consent allow | Where the company must trade through and a bank will not move |
| Refinancing after the DOCA is satisfied | Replacing short-term or distressed facilities once the deed is completed | Specialist and private lenders first, banks later as the record ages | Registered mortgage over company or director property | Once the deed is satisfied and there is a clean, current trading story |
What should the company do after the DOCA is completed?
Completion is not the end of the finance work. It is the point where the company has to turn a legal outcome into a lender-readable recovery story. The strongest post-DOCA files do not rely on the phrase "the deed is done" by itself. They show the completion evidence, what obligations remain, how the business has traded since, and why the next facility is serviceable.
| Step | Why it matters to a lender | Evidence to keep ready |
|---|---|---|
| 1. Prove how the deed ended | The lender needs evidence that the promised obligations were actually fulfilled or that the deed ended in the way its terms allowed | The executed deed, any variations, written confirmation from the deed administrator, and records of contributions or payments |
| 2. Map what survived | Completion of the company deed does not automatically release every secured debt, guarantee, tax exposure or personal liability | An updated debt schedule, guarantee map, ATO position and legal or insolvency advice on remaining obligations |
| 3. Rebuild current trading evidence | A lender is deciding whether the business works now, not only whether the old process ended | Current management accounts, bank statements, BAS and tax lodgments, aged receivables and payables, and evidence new obligations are being paid on time |
| 4. Refinance the urgent facility | Short-term funding used during distress may need to be replaced before it becomes the next cash-flow problem | A current payout figure, security position, serviceability evidence and a defined refinance or sale exit |
| 5. Review the next lender window | A wider range of options may become available as clean trading and repayment history build, but there is no automatic timetable | Updated financials and conduct evidence at each review, rather than assuming time alone will change policy |
Reading down the two tables, the through-line is not that funding automatically becomes cheaper or mainstream with time. It is that a completed deed, clean current trading, stronger conduct and a credible exit can widen the set of lenders willing to assess the file. The specialist and private credit market that funds these situations is now large enough that ASIC runs dedicated surveillance of it, so it is an established part of the system rather than a fringe of it. Where the trigger for the whole episode was a mortgagee moving on a property, the sibling guide on refinancing out of a mortgagee sale covers that route, and the fresh receivership and completed-deed exit piece looks at the timing window in more detail.
Why do banks say no, and what do specialist and private lenders actually assess?
A recent DOCA may fall outside mainstream lender policy or require a higher level of credit review. A decline does not, by itself, prove the business is unviable. Specialist and private lenders may assess the current cash flow, security, deed status, director position and repayment exit in more detail, but approval and terms still depend on the lender and the full circumstances of the file. The practical difference is not "bank bad, private lender good". It is whether the file can be evidenced and whether the proposed loan has a safe, believable way out.
What documents do lenders usually need for DOCA finance?
There is no universal document list, but distressed-company finance becomes slower when the legal process, the company numbers and the director's property position arrive as three disconnected stories. A broker should be able to show how they fit together. The following is a typical starting pack from our broking files, not a lender promise or a substitute for the administrator's requirements.
| Document group | Examples a lender or broker may request | The question those documents answer |
|---|---|---|
| The deed and the deadline | The DOCA proposal or executed deed, administrator's report, any variations, contribution amount, payment dates and evidence of what has already been paid | What exactly must the finance achieve, who has authority, and by what date? |
| Current trading | Recent business bank statements, management accounts, BAS, tax lodgments, aged receivables and payables, key contracts and a cash-flow forecast | Can the company meet new obligations and service the proposed facility after the old debt is dealt with? |
| Company and director liabilities | An updated debt schedule, current lender statements, ATO account position, known director penalty notices, personal guarantees, judgments and other external administration documents | What debt survives the deed, what could be enforced personally, and is the proposed security really available? |
| Property or other security | Property addresses, ownership details, rates notices, current mortgage statements, existing caveats or securities, valuation access, lease details where relevant, and every co-owner's details | What is the real equity, who must consent, and where would a new lender rank? |
| The exit | Refinance evidence, sale evidence, a current payout figure, projected serviceability and a dated repayment plan | How and when will this higher-risk facility be repaid without creating the next crisis? |
| Identity and structure | Director identification, company and trust documents, ownership structure and beneficial-owner information | Who is borrowing, who is giving security, and are all parties able to sign? |
The two cards below then set out what tends to stall a DOCA-stage file and what tends to make one assessable, from the lender's chair.
What gets a file funded
- A deed that is satisfied, or has a believable, dated path to being satisfied
- Real equity in the security, usually the director's property, behind any first mortgage
- Current cash flow that services the new facility, evidenced not asserted
- A clear exit: the sale, refinance or trading that repays the loan on a known date
- Director exposure understood up front, with guarantees and any penalty position mapped
What stalls a file
- Unresolved director penalty exposure hanging over the director personally
- A deed with no believable route to completion, or already at risk of termination
- Security already fully encumbered, with no equity headroom to lend against
- No post-DOCA trading story a lender can actually back
- Consent missing, whether a first mortgagee's or a co-owner's, discovered late
From our broking files, general only
What we see on deed of company arrangement files, kept to direction rather than numbers, because a distress file is exactly where a made-up figure does harm.
- Lenders fund the exit, not the distress. A credible, satisfiable deed, current cash flow that services the new facility, and real property security count for more than the insolvency flag itself.
- The security usually comes from the director personally, not the company, which is why these deals are second mortgage and private lending shaped, and why the director's personal exposure has to be understood before anything is drawn.
- Timing splits the deal. Funding a deed contribution to keep the company alive is a different conversation from refinancing once the deed is satisfied, and lenders treat during and after very differently.
- What tends to stall a file: unresolved director penalty exposure, a deed with no believable path to completion, security already fully encumbered, or no post-DOCA trading story a lender can back.
General information only, from broking experience, and not financial, legal or insolvency advice. This is not a rate, a cost, an approval or an outcome you will get; every company, deed and creditor position is different. Speak to a qualified broker, your accountant, and a registered liquidator or insolvency practitioner.
None of that makes a DOCA-stage file a soft one; it makes the preparation the whole game. A directors' guarantee that has been mapped, a deed that is on track, and a security position with real headroom are what turn a specialist lender's maybe into a yes, and our explainer on how directors' guarantees work unpacks the piece directors most often miss.
Does a DOCA stop a director penalty notice?
Before funding anything, a director has to understand where the company's tax debts can become their own, because a deed does not touch that. Under the ATO's director penalty regime, a director can be made personally liable for the company's unpaid PAYG withholding, GST and super guarantee charge, pursued through a director penalty notice. Whether appointing an administrator helps depends entirely on timing. Where the amounts were reported to the ATO within three months of the due date, the personal penalty is a non-lockdown one, and it can be dealt with by paying, or by appointing an administrator or a small business restructuring practitioner, or by starting to wind the company up, within 21 days of the notice. Where the amounts were reported more than three months late, or never reported, it is a lockdown penalty, and it can only be remitted by paying the company's debt in full (ATO, as at 16 April 2026).
The reason this sits in a finance guide is that a lockdown penalty changes the whole picture: it means the director carries a personal debt that survives whatever happens to the company, which affects how much personal security is really free to fund a deed, and how a lender reads the director's own position. Two directors with identical companies can be in very different places depending only on whether the lodgments were on time. Where the trigger for the distress was an ATO debt more broadly, the sibling guide on finance around an ATO tax debt covers that ground; this section stays on the personal-liability point, and it is general information, not tax or legal advice.
What happens to a personal guarantee in a DOCA?
The second personal exposure is the guarantee, and it is the one directors most often assume a deed will solve. It will not. One timing distinction matters: while the company is in voluntary administration, ASIC says a creditor holding a personal guarantee generally cannot act under it without the court's consent. That is a temporary stay, not a release. Once the company enters a DOCA, ASIC's guidance is explicit that the deed does not prevent a creditor who holds a personal guarantee from acting under it to be repaid (ASIC, as at 7 May 2025). So a deed can compromise what the company owes and still leave a lender free to pursue the director who guaranteed the debt. That is why every guarantee has to be found and mapped before a deed is proposed, not discovered after it binds.
If a guarantee is called and cannot be met, the director's problem stops being a corporate one and becomes a personal-insolvency one, and that is a separate system with a separate regulator. Personal insolvency in Australia is administered by AFSA, the Australian Financial Security Authority, and the options if a personal debt cannot be paid are bankruptcy, a debt agreement under Part IX, or a personal insolvency agreement under Part X (AFSA). Company insolvency and personal insolvency are two different tracks, run by ASIC and AFSA respectively, and a director in a DOCA can end up touching both. The directors' guarantee entry and our note on how a guarantee reads on a later loan go further on the finance side; the personal-insolvency decision itself is one for a registered practitioner and a lawyer.
Will a director lose their home because the company enters voluntary administration or a DOCA?
No, not automatically. A company entering voluntary administration or a DOCA does not by itself transfer the director's home to creditors. The property becomes relevant because of a separate legal or financial connection: it may already secure company debt, the director may have given a personal guarantee that is later enforced, a director penalty or other personal liability may exist, or the director may voluntarily offer the property as new security to fund the deed. Those pathways are different and should not be collapsed into the frightening but inaccurate idea that "the company entered administration, so the house is gone."
The timing also matters. During voluntary administration, enforcement under a director's personal guarantee is generally stayed unless the court consents. A DOCA does not provide the same automatic protection: ASIC states that the deed does not stop a creditor acting under a personal guarantee. A guarantee claim does not itself mean the home is immediately sold, but it can create a personal debt and enforcement risk that ultimately puts personal assets at risk. The actual pathway depends on the guarantee, any mortgage or security already granted, the creditor's action, the director's wider financial position and legal advice.
| Pathway | What it means | Does the DOCA remove it? | Finance question to answer |
|---|---|---|---|
| The home already secures company debt | A mortgage, caveat or other security was granted before the insolvency process | Not automatically. Secured-creditor rights and the deed terms must be checked | What is secured, what is the current payout, and what enforcement or consent rights exist? |
| The director gave a personal guarantee | The creditor may pursue the director personally if the guarantee is enforceable and the debt is unpaid | No. ASIC says the DOCA does not prevent action under the guarantee | What is the maximum guaranteed amount, are there multiple guarantees, and what personal assets are exposed? |
| The director has a DPN or other personal debt | The liability sits with the director, separately from the company's compromised debts | No. The company deed does not extinguish a separate personal liability | How much personal debt exists before any new property-backed facility is considered? |
| The director offers the home to fund the deed | A new first or second mortgage, caveat or private facility moves additional risk onto the property | The new security is created by the finance transaction itself | Is the underlying business viable, what is the worst-case loss, who else owns the property, and what is the exit? |
If the property is jointly owned, every registered owner is part of the security decision, not a bystander. Lender and legal requirements vary, but a co-owner may need to sign security documents and obtain independent legal advice. This is exactly why the family-home question should be resolved before a term sheet is treated as a rescue plan. The second mortgage page explains the security mechanics; the decision to risk the property belongs alongside independent legal and insolvency advice.
Is it legal to move the business to a new company during insolvency?
There is a line running through all of this that must not be crossed, and it is worth naming plainly because it is where good intentions and bad advice sometimes meet. Restructuring a company legitimately, through a deed of company arrangement or small business restructuring, with a registered practitioner, is a lawful use of the system. Quietly moving the assets of an indebted company into a new company to escape the old company's debts is not. ASIC describes illegal phoenix activity as directors abandoning a company or transferring its business to a new company without paying true or market value, leaving the debts behind (ASIC, as at 7 January 2026). It is not a clever finance strategy and this guide does not treat it as one.
The consequences are real and personal. ASIC responds to illegal phoenix activity with civil and criminal action, administrative action including director disqualification, and prosecution of directors, and it works with the ATO through a joint Phoenix Taskforce. Because external administration and disqualification are recorded, it is also visible. The safe path, and the one this guide is about, is to use the formal processes properly and to fund the legitimate ones, taking advice from a registered liquidator on where the line sits. If moving a business to a new entity is ever the right step, it is done transparently, at proper value, and on advice, not as a way around creditors.
What does DOCA-stage finance cost, and what does it do to credit?
Finance taken at the deed stage is priced for speed and risk, not like a bank loan. The cost is a stack rather than a single rate, made up of interest above bank pricing plus establishment, legal and valuation fees, and sometimes a minimum term. A second-ranking security may require the existing first mortgagee's consent under the current loan terms or the proposed lender's requirements, and every registered owner must be part of the security process where the property is shared. That last point catches people out: if the security is the family home, a partner who co-owns it is part of the decision, not a bystander to it. This guide does not publish indicative rates, because a real figure turns entirely on the security, the loan to value and the exit, and a made-up number on a distress page does more harm than good. The discipline is to weigh the total cost of the facility against the alternative, and to make sure a defined, short-term cost is replacing an open-ended problem, not adding to it.
On credit, an insolvency event leaves a mark. External administration is recorded on the company's ASIC record, and insolvency-related defaults and other credit events sit on a credit file for defined periods: a default and a court judgment for five years each, a credit enquiry for five years, repayment history for two years, and a serious credit infringement for seven years (OAIC, as at 9 October 2025). Those marks are part of why mainstream lenders stay cautious for a while, and part of why the finance in this space comes from specialist and private lenders first. If the wider problem is several debts to bring under control rather than one deed to fund, the business debt consolidation guide is the better starting point.
What happens if a DOCA payment is missed or the deed cannot be completed?
A missed or threatened DOCA milestone is serious, but the consequence depends on the deed. The deed may specify what happens automatically, creditors may be asked to vary the terms, creditors may vote to terminate the deed, or a court may terminate it in defined circumstances. Liquidation can follow. The worst time to raise the problem is after the deadline has passed and the finance request is framed as an emergency with no current numbers, no valuation and no agreed path with the deed administrator.
ASIC says a director must notify the deed administrator if they become aware of a material contravention, or a likely material contravention, of the deed. The deed administrator must then notify creditors as soon as practicable after becoming aware of it. ASIC also says a deed can end because its obligations have been fulfilled, because an automatic termination condition occurs, because creditors vote to end it, or because a court terminates it. If the court terminates the DOCA on the statutory grounds ASIC lists, the company automatically goes into liquidation.
| Action | Why it matters |
|---|---|
| Tell the deed administrator early | The deed administrator needs to understand any material or likely contravention, and early notice preserves more options than a surprise after default |
| Read the actual breach and termination clauses | The consequences are deed-specific. Do not assume every missed date has the same result |
| Separate a temporary timing gap from a broken business model | Finance may solve a defined settlement or timing problem; it cannot make an unviable business viable by itself |
| Build a complete funding case | An exact amount, exact deadline, current trading evidence, available security and a credible exit are needed before a lender can assess whether funding is real |
| Obtain insolvency and legal advice on variation or termination | A broker cannot vary a deed, bind creditors or decide whether continuing the deed is in creditors' interests |
Finance is therefore one tool inside the response, not the response itself. A new facility has to cure a defined problem and leave the company able to meet both the deed and its new obligations. Where the deed has no believable path to completion, the security is exhausted or the company continues to lose cash, adding a property-backed loan can move the loss from the company to the director without saving the business.
Where can a director get help, and how can they check a lender or adviser?
Because a company in a deed is in genuine distress, the first calls should be to advice, not to a lender, and much of that advice is free. Free, confidential support for small business owners under financial pressure is available from the Small Business Debt Helpline on 1800 413 828, and general free financial counselling from the National Debt Helpline. The deed itself has to be handled by a registered liquidator, and you can and should check that whoever is advising on the insolvency is properly registered: ASIC's insolvency information for directors explains the process and how to find a registered practitioner. For the personal side, if a guarantee has pushed a director toward personal insolvency, AFSA sets out the options.
On the finance, the same care applies to checking a lender. A commercial, business-purpose loan sits outside the consumer credit system: ASIC's guidance is that where credit is not predominantly for personal, domestic or household purposes it is generally not regulated under the National Credit Act, and loans to companies are not caught at all (ASIC INFO 101, as at 20 October 2020). Commercial loans carry the lowest level of legal protection, and commercial-only lenders need not hold a credit licence or be members of AFCA, though the ASIC Act still bans unconscionable, misleading or deceptive conduct and unfair terms in standard-form small business contracts (ASIC INFO 207, as at 19 April 2024). Read the loan documents, understand the total cost and the security, and take independent legal and insolvency advice before signing anything.
What happens after you speak to a broker about DOCA finance?
The first useful outcome is not always a loan quote. It may be identifying that the deadline is too close for the proposed security, that the administrator or deed terms need to be clarified, that the director's personal exposure is not yet understood, or that the business needs current financial evidence before a lender can assess it. A good process should surface that early rather than forcing every enquiry into an application.
| Step | What should happen |
|---|---|
| 1. Identify the stage and hard deadline | Confirm whether the company is pre-appointment, in voluntary administration, awaiting execution, operating under the deed, at risk of breach or already completed |
| 2. Confirm the insolvency-advice workstream | Identify the registered liquidator or insolvency adviser and separate their role from the broker's role. The broker assesses finance; the practitioner advises on the process and deed |
| 3. Map the company and director together | Review the contribution or refinance need, current trading, company debts, guarantees, director penalties, personal debts, property ownership and existing security |
| 4. Test whether there is a financeable structure | Match the purpose, amount, timing, security, serviceability and exit to lender appetite. The answer may be property finance, receivables funding, a later refinance or no finance at the current stage |
| 5. Obtain terms and complete conditions | Where there is a fit, progress the valuation, consents, updated financial evidence, legal documents and any administrator or deed requirements in parallel |
| 6. Settle into the plan and track the exit | Make sure the funds go to the intended deed, creditor or refinance purpose, then keep the next repayment or refinance milestone visible from day one |
A deed of company arrangement is a deal to keep a company alive, not automatically the end of it. The finance answer changes with the stage: before the creditor vote, while the deed is being funded, while the company trades through, when a milestone is at risk, and after the deed is completed. A lender needs the legal process, current trading, director exposure, security and exit to tell one coherent story. The files that become assessable share one shape: an exact deadline, a deed that can realistically be completed, evidence the underlying business works, available security where required, and a clear path out of the new facility.
Key takeaway: get insolvency advice on the deed and finance advice on the exit early. Do not risk personal property merely because equity exists, and never move assets to a new company to dodge creditors.Frequently Asked Questions
Sometimes, and usually from specialist or private lenders rather than a bank. While a deed runs, the deed administrator is involved and the terms of the deed shape what the company can do, so lenders look closely at the deed, the security on offer and how the loan will be repaid. Property-secured funding is often the practical route, and the security frequently comes from the director personally rather than the company. It is general information, not insolvency or credit advice. See the private lending page for the kind of funding involved.
It depends on the deed. During the voluntary administration that comes first, the administrator controls the company and the directors' powers are largely suspended. Once the DOCA starts, the deed administrator makes sure the company and any other contributors carry out their commitments, and the extent of the administrator's ongoing role is set by the deed. The directors' day-to-day role therefore depends on the deed's terms.
The deed contribution, the money promised to creditors, can come from future trading, a lump sum, the sale of an asset, or borrowed funds. Where it is borrowed, it is often raised against property the director owns personally, through a second mortgage or private lending, rather than from the company itself. That is why funding a deed is usually a director-security conversation, and why a director's own exposure needs to be understood before anything is drawn.
Often, once the deed is completed and the outcome can be evidenced. A recent insolvency event may still fall outside some mainstream policies or require a higher level of credit review, so specialist commercial or private lenders may be considered first. Lenders will look at the deed completion evidence, current trading, repayment conduct, security, remaining liabilities and the exit. As clean trading and conduct build, a wider range of options may become available, but there is no automatic timetable.
There is no universal checklist, but a typical starting pack includes the DOCA proposal or executed deed, the administrator's report, any variations, the exact contribution amount and deadline, current business bank statements and management accounts, BAS and tax information, an updated debt and guarantee schedule, details of any director penalty exposure, property ownership and mortgage statements where security is offered, and a clear refinance or sale exit. Requirements vary by lender and stage.
Not by itself. The ATO's director penalty regime makes directors personally liable for the company's unpaid PAYG withholding, GST and super guarantee charge. Where the amounts were reported within three months of the due date, appointing an administrator or a small business restructuring practitioner, or beginning to wind the company up, within 21 days of the notice, is one way to deal with a non-lockdown penalty. But a lockdown penalty, where amounts were reported more than three months late or never, can only be remitted by paying the company debt in full (ATO, as at 16 April 2026). The director penalty notice glossary entry covers this.
The guarantee survives the deed. ASIC's guidance is that a deed of company arrangement does not prevent a creditor who holds a personal guarantee from the company's director, or another person, acting under that guarantee to be repaid. So a deed can bind the company's creditors and still leave a lender free to pursue a director who guaranteed the debt. That is why the director's personal exposure, through guarantees, has to be mapped before a deed is proposed. See our explainer on directors' guarantees.
Not automatically. The company entering voluntary administration or a DOCA does not itself transfer the director's home to creditors. The home can become exposed if it already secures company debt, a personal guarantee is enforced and creates a personal debt, a director penalty or other personal liability exists, or the director offers the property as new security to fund the deed. During voluntary administration, action under a personal guarantee is generally stayed without court consent, but ASIC says a DOCA does not prevent a creditor acting under the guarantee. Legal advice is essential.
Yes. External administration appointments, including a deed of company arrangement, are recorded on the company's ASIC record, and a lender or supplier can see them. For the directors, the fallout is more personal than corporate: guarantees can be called, director penalty exposure can crystallise, and insolvency-related defaults can sit on a credit file for years (a default stays five years, a serious credit infringement seven, per the OAIC). None of that makes finance impossible, but it does shape who will lend and on what terms. Get insolvency advice on the record and finance advice on the exit.
The consequence depends on the deed. A director must notify the deed administrator of a material or likely material contravention. The deed may specify automatic consequences, creditors may consider a variation or vote to terminate it, and a court can terminate a DOCA on defined grounds. Liquidation can follow. Raise the problem before the deadline where possible, because finance can only help if it cures a defined gap and leaves the company able to meet both the deed and its new obligations.
What sources support this guide?
This guide is built on primary sources: ASIC's insolvency guidance on how a deed of company arrangement and the processes around it work, ASIC's July 2026 statistical review of how deeds actually play out (REP 836), the ATO on director penalties, AFSA on personal insolvency, and the OAIC on credit reporting. Each was read again for this update, and every regulatory point is shown with its source and date beside it. The table shows what supports which claim, and how current it is.
| Source | What it supports | As at |
|---|---|---|
| ASIC, Deed of company arrangement for creditors | What a DOCA binds, the personal-guarantee carve-out, and the 15 business day signing rule | 7 May 2025 |
| ASIC REP 836, Review of the voluntary administration and DOCA process 2021-25 | How common DOCAs are, how they are funded (third-party funding), and their outcomes (trading on, business sale, effectuation) | 7 Jul 2026 |
| ASIC, Voluntary administration: a guide for creditors | The three choices at the second creditors' meeting, the temporary stay on personal-guarantee enforcement during VA, deed contents, monitoring, variation and termination | 17 Dec 2024 |
| ASIC, Small business restructuring and the restructuring plan | The debtor-in-possession process and its liabilities cap, distinct from a DOCA | 18 Jun 2025 |
| ATO, Director penalties | Personal director liability for PAYG withholding, GST and super, and the lockdown timing rule | 16 Apr 2026 |
| ASIC, Action on illegal phoenix activity | What illegal phoenix activity is and the consequences, including director disqualification | 7 Jan 2026 |
| AFSA, Compare your insolvency options | The personal-insolvency fork if a guarantee is called: bankruptcy, debt agreement, personal insolvency agreement | Accessed 13 Jul 2026 |
| OAIC, What stays on a credit report | How long defaults and other insolvency-related events stay on a credit file | 9 Oct 2025 |
| ASIC INFO 101 and INFO 207 | Business-purpose credit, loans to companies, and the level of borrower protection | 20 Oct 2020 / 19 Apr 2024 |
Regulatory positions are summarised, not reproduced in full, and none of this is legal, insolvency, tax or financial advice. Rules and thresholds can change, so the current ASIC, ATO, AFSA and OAIC pages are the place to confirm them before you act, alongside advice from a registered liquidator.
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