Creditor

Most owners think of “creditor” as a banking word, but the list is usually longer than people expect. The freight company you pay monthly, the accountant who invoices after lodgement, the landlord, the ATO and any staff waiting on their next pay run are all creditors of your business at some point in the month.

What counts as a creditor?

A creditor is simply the party on the receiving end of a debt. ASIC’s guide for creditors in a liquidation lists suppliers, lenders, customers who paid for goods they never received, and employees owed wages or entitlements. It also describes contingent creditors: people who will only be owed money if something happens, such as winning a court claim against the company.

The opposite role is the debtor. Every business is both at once. Customers who haven’t paid are your debtors, and the people you haven’t paid are your creditors.

Secured and unsecured creditors

The single most important split is whether a creditor holds security.

	Secured creditor	Unsecured creditor
What they hold	A mortgage over land, or a security interest over other assets registered on the PPSR	Nothing beyond a promise to pay
Typical examples	Banks, equipment financiers, caveat and second mortgage lenders, suppliers with registered retention of title	Most trade suppliers, utilities, the ATO, many online lenders
Where they rank	Paid from the assets they hold security over	Paid from what’s left, after priority claims

In a company liquidation, ASIC sets out the usual order: the liquidator’s costs, then employee wages and super, leave entitlements and retrenchment pay, then everyone else who is unsecured. A group must be cleared completely before the one below it sees a cent, and if there isn’t enough for a group, it’s split proportionally. Secured creditors are dealt with from the assets their security covers. You can read more on our secured creditor and unsecured creditor pages.

Why your creditors matter when you apply for a loan

A lender assessing your application is really asking two questions about your existing creditors.

How many are there, and how far behind are they? Credit assessors look at an aged payables report, the mirror image of aged receivables. Suppliers sitting at 90-plus days, repeated dishonours or a growing ATO balance all suggest the business is funding itself by paying people late.

Who already holds security? A PPSR search shows registered interests over the business’s personal property, and a title search shows mortgages and caveats on land. If an existing financier already has a general security agreement over everything the company owns, a new lender knows it will rank behind.

When more than one creditor is chasing you in the same week, a single facility that clears them can make the month manageable again. See what you might qualify for before the next demand lands.

A worked example: a wholesaler’s creditor list

Imagine a food wholesaler in Western Sydney with these balances at the end of the month:

• Equipment financier on the cool room and forklift: $68,000, registered on the PPSR (secured)
• Three produce suppliers: $41,000 combined, one at 75 days (unsecured, no registration)
• ATO running balance account: $29,000 (unsecured)
• Staff wages and super for the fortnight: $22,000 (priority unsecured if the company failed)

A lender reviewing this would see one secured creditor with a clear claim on specific equipment and a group of unsecured debts that are starting to age. A consolidation loan of around $70,000, paid directly to the produce suppliers and the ATO, would turn three pressure points into one scheduled repayment. The produce supplier at 75 days is the one to call first: a supplier who is kept informed is far less likely to issue a statutory demand.

Related terms

• Debtor: the party that owes the money.
• Trade credit: supplier terms that make suppliers your creditors.
• Retention of title: how a supplier keeps ownership until it’s paid.
• Liquidation: where creditor ranking matters most.

Too many creditors calling at once?

Juggling suppliers, the ATO and payroll in the same week is exhausting, and we hear from owners in exactly that spot week in, week out. Options range from a debt consolidation loan to a property-backed facility that clears everything in one go, and the right one depends on your security and trading history.

The enquiry form takes roughly a minute. Making it is not a credit application, so nothing is recorded on your file, and we keep what you tell us in-house instead of shopping it around. Someone from our team reads it and rings you to talk it through, so list your creditors and balances as precisely as you can; it makes that first conversation far more useful.

Talk to someone about your creditors →