Debt Restructuring · Question

Should I restructure all my facilities or only the stressed one?

Short answer

Limit the request to the stressed facility only if the other facilities are genuinely healthy and not tied to it through shared security, cross-default clauses or common cash flows. If the stress has spread, or the lender sees the credit as one exposure, a narrow request may be refused or may merely move the problem. The honest answer depends on how your facilities are linked.

In more detail

Start by mapping how the facilities connect, because the lender will do the same.

Shared security: if one asset secures several facilities, a change to one touches the others.
Cross-default clauses: many loan agreements let a lender treat default on one facility as default on all of them.
Common cash flow: a term loan and a working capital line usually draw on the same business income.
Multiple lenders: another lender may react to news of a restructuring elsewhere, especially where information is shared among them.

A single project loan stressed by a delayed commissioning date, with a healthy working capital line and clean history on everything else, can often be handled alone. The cause is specific and the fix is specific.

If receivables are stuck, stock is aging and the working capital line is running at its limit while the term loan falls behind, the two are the same problem. Restructuring only the term loan leaves the cash drain in place and the second facility likely to follow.

Read cross-default wording first

A restructuring of one facility may itself trigger default wording in others. Check each agreement, and ask the lender whether it will record a written position on the other facilities so a single change does not cascade.

Also consider the cost of going wide: more lenders to coordinate, more covenants, and more scrutiny. Neither path is free of cost. Choose the one that matches where the stress truly sits, and be ready to show the lender the evidence.

Key points

Map shared security, cross-default clauses, common cash flows and other lenders before deciding scope.
A narrow request fits a specific, isolated cause such as a delayed project.
Spread-out stress usually needs every affected facility looked at together.
Check whether restructuring one line triggers default wording in another agreement.

Who this applies to

Borrowers with a term loan and a working capital line from the same or different lenders.
Promoters whose personal or corporate guarantees cover several facilities.
Finance heads deciding the scope of the request pack.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.