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Commercial loan renewal: prepare before the file is reopened
A renewal is not an administrative rollover. It is a fresh credit decision in which rate, amortization, covenants, security and facility size are all available to be changed. What determines the outcome is largely settled in the twelve months before maturity.
When should a business start preparing for a commercial loan renewal?
Twelve to eighteen months before maturity for any material facility. Debt service coverage and balance-sheet issues take one to three quarters to improve, assembling a complete package takes several weeks, and an alternative lender needs roughly ninety days to underwrite. Starting inside sixty days usually means accepting the incumbent's terms.
Countdown
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The tool identifies which preparation stage you are in. It does not represent any lender's requirements or process.
Enter a maturity date to see the preparation stage that applies and the work that belongs in it.
| Stage | What to do |
|---|---|
| 18 months out | Confirm every maturity date across all facilities. Identify whether more than one matures in the same quarter — clustered maturities remove your ability to negotiate one at a time. |
| 12 months out | Calculate DSCR and leverage on the current trailing twelve months. If either is outside the range your existing covenant requires, you now have three quarters to act rather than three weeks. |
| 9 months out | Clean the balance sheet: collect or write off stale receivables, resolve CRA balances, formalize shareholder loan postponements, discharge stale PPSA registrations. |
| 6 months out | Assemble the package — statements, debt schedule, aging, projections, 13-week forecast, sources and uses. Decide whether you are renewing, refinancing, or running a competitive process. |
| 3 months out | Open the conversation with the incumbent and at least one alternative. Three months is enough time for a second lender to underwrite; three weeks is not. |
| Maturity | Documentation, security registration and funding. Where a short extension is needed, it is far easier to obtain when the file is complete and the request was raised early. |
This timeline reflects general practice in Canadian commercial lending. It is not a lender requirement, and it does not constitute legal or financing advice on any specific facility.
Questions people ask
Renewals, answered directly
When should I start preparing for a commercial loan renewal?+
Twelve to eighteen months before maturity for a material facility. Coverage ratios and balance-sheet issues take one to three quarters to move, and a competing lender needs roughly ninety days to underwrite. Preparation inside the final sixty days generally means accepting whatever the incumbent offers.
What happens if a commercial loan is not renewed?+
The facility becomes due on its maturity date. In practice lenders often grant a short extension while a refinancing completes, but an extension is discretionary, is usually priced, and may come with conditions. Relying on one is a planning failure rather than a strategy.
Can a lender change the terms at renewal?+
Yes. A renewal is a fresh credit decision. Rate, amortization, covenants, security, guarantees and facility size can all change, and will if performance, collateral values or the lender's own appetite for the sector have moved since the loan was written.
Should I approach other lenders before renewal?+
Usually yes, provided you have time to do it properly. A credible alternative is the main source of negotiating leverage at renewal. Running a process at sixty days with an incomplete file tends to produce worse terms than not running one at all.
What most often causes a renewal to be repriced?+
Deteriorated coverage, a covenant breach in the prior term (even a waived one), increased customer concentration, receivables aging, a change in the sector's risk weighting, or documentation arriving late and incomplete. The last is the one entirely within your control.
Does a covenant breach during the term affect renewal?+
Frequently, even where it was waived at the time. Waivers are recorded on the file and read at renewal. A breach that was identified early, disclosed proactively and remediated reads very differently from one the lender discovered from your statements.
Related: commercial mortgage renewal in Canada, covenant monitoring, and the document checklist.
Renewal terms are decided on the file, not in the meeting.
Request a confidential review of your upcoming maturity and we will tell you what an adjudicator is likely to see when the file is reopened.
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