The landscape of private debt is evolving fast. After years of low interest rates and abundant liquidity, the financial environment of 2025 demands a different kind of agility. For high-net-worth (HNW) and ultra-high-net-worth (UHNW) borrowers, managing leverage is no longer simply about securing the cheapest rate — it’s about structuring debt that can withstand volatility.

As interest rates normalise and refinancing costs rise, even the most sophisticated borrowers are reassessing their balance sheets. Lenders, too, have become more selective, focusing on risk-adjusted returns rather than aggressive growth. Against this backdrop, debt restructuring has emerged as a key discipline — a proactive way to protect assets, preserve liquidity, and ensure that leverage continues to serve the borrower’s long-term goals.

In 2025, restructuring is not about distress; it’s about strategy.

Why Borrowers Are Restructuring Now

For much of the last decade, access to credit was defined by abundance. Cheap capital allowed private borrowers to expand portfolios, take on complex developments, or refinance easily at maturity. But rising base rates, tighter credit conditions, and shifting valuations have altered that equation.

Many borrowers now face refinancing challenges: loans agreed at historically low rates are maturing into a higher-rate environment, reducing net yields and cash flow flexibility. Others are dealing with slower asset sales or valuation adjustments that complicate planned exits.

Rather than waiting for lenders to dictate terms, sophisticated borrowers are taking control — restructuring early, before pressure mounts.

Restructuring can involve extending maturities, adjusting covenants, introducing mezzanine or preferred equity layers, or consolidating multiple facilities under a single lender. The goal is to make the capital stack more resilient, not reactive.

What Effective Debt Restructuring Achieves

At its core, debt restructuring is about alignment. It ensures that the borrower’s financing still matches the underlying performance of their assets and the realities of the market. For large private borrowers, this means optimising not just individual loans, but the overall structure of their portfolio finance.

A well-executed restructuring can:

• Reduce immediate repayment pressure by extending loan terms or converting short-term bridging debt into longer-term facilities.

• Lower debt service costs by renegotiating margins or switching to alternative lenders with more flexible criteria.

• Improve liquidity by consolidating multiple smaller loans into a single, larger facility that frees up capital.

• Protect assets by preventing forced sales or defaults that might crystallise losses at unfavourable valuations.

Increasingly, lenders are open to these adjustments when approached early, with clear data and a credible plan.

The Role of Private Credit in Restructuring

Traditional banks remain cautious in 2025, especially when it comes to non-core or development-linked exposures. Their capital and regulatory constraints make them less agile in responding to borrower needs.

Private credit lenders, by contrast, have become central players in the restructuring market. They are not bound by the same capital ratios or standardised models, and they can evaluate opportunities based on a borrower’s broader profile and asset quality.

For HNW clients and family offices, this flexibility is transformative. Private lenders are increasingly willing to refinance existing bank debt, introduce bridge-to-exit structures, or provide hybrid facilities that combine senior, mezzanine, and equity features under one roof.

These transactions often move faster than traditional refinances and are negotiated with greater discretion. The focus is on long-term asset value and borrower credibility, not rigid affordability metrics.

Common Triggers for Debt Restructuring in 2025

While every transaction is unique, certain themes have become consistent drivers for restructuring:

Rising Interest Costs: As base rates stabilise above historical norms, borrowers with legacy loans are seeing significant margin compression. Refinancing into fixed or capped-rate facilities can provide certainty.

Maturing Bridging or Development Finance: Many projects funded under short-term facilities now require exit solutions. Rolling these into term debt or hybrid structures protects cash flow and avoids distressed sales.

Portfolio Consolidation: Borrowers with multiple facilities across different lenders often restructure for efficiency — reducing administrative burden and achieving better blended pricing.

Valuation Adjustments: Asset revaluations, particularly in commercial and development sectors, can trigger breaches of loan-to-value (LTV) covenants. Restructuring ahead of such reviews preserves control.

Succession or Corporate Change: Family offices undergoing internal reorganisation may need to realign ownership and debt structures to maintain financing continuity.

Each of these triggers presents both a challenge and an opportunity — provided it is addressed early.

How Lenders Evaluate Restructuring Requests

Lenders today are pragmatic. They understand that market conditions have shifted for everyone, and that a well-managed restructuring is often a sign of financial maturity, not weakness.

When approached with transparency and preparation, lenders will assess three core factors:

1. Quality of the underlying assets — whether the collateral still supports the facility at sustainable leverage levels.
2. Borrower track record and communication — proactive engagement goes a long way toward maintaining lender confidence.
3. Feasibility of the revised structure — including new repayment terms, security arrangements, and projected cash flows.

Borrowers who present a coherent plan — supported by professional advisors and accurate data — often secure favourable outcomes even in challenging markets

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Restructuring Across Jurisdictions and Entities

For HNW borrowers with international holdings, debt restructuring often involves multiple jurisdictions and ownership layers. Assets may sit within UK SPVs, offshore companies, or family trusts, each with its own governance and compliance obligations.

Lenders are comfortable working through these frameworks — provided documentation is clear and beneficial ownership is transparent. Cross-border restructurings can even unlock efficiencies, allowing borrowers to shift leverage toward jurisdictions with stronger liquidity or lower financing costs.

However, execution requires precision. Legal counsel in each jurisdiction must confirm that the entity has the authority to borrow, grant security, or amend loan terms. Professional coordination between fiduciary administrators, tax advisors, and lenders ensures that restructuring delivers the intended outcome without unintended tax or legal consequences.

The Strategic Importance of Timing

The best restructurings are proactive, not reactive. Borrowers who start conversations early — ideally 6 to 12 months before loan maturity — have far greater control over terms and lender selection.

Waiting until covenants are breached or facilities near expiry often reduces options and increases cost. Early engagement also allows time to explore alternative funding routes, from private credit refinancing to partial equity injections or joint venture capital.

In 2025’s cautious but liquid market, lenders value preparation. Borrowers who can present clear evidence of asset value, repayment strategy, and financial discipline will find strong appetite among private lenders eager to deploy capital into well-structured opportunities.

How Willow Private Finance Can Help

At Willow Private Finance, we work with private banks, specialist credit funds, and family offices to help large private borrowers restructure intelligently. Our expertise lies in navigating complexity — aligning borrower objectives with lender expectations and ensuring that restructuring strengthens, rather than weakens, financial position.

We review existing facilities, assess risk exposure, and identify alternative lending solutions that enhance liquidity or reduce cost. Our network of private lenders allows us to source refinancing options quickly, often bridging from short-term pressure to long-term stability.

Whether restructuring a £10 million residential facility or a £100 million multi-asset portfolio, our approach is discreet, data-driven, and results-oriented.

Frequently Asked Questions

What does debt restructuring mean for private borrowers?
Debt restructuring involves renegotiating existing lending terms to improve sustainability — for example, by extending loan maturity, adjusting rates, or consolidating multiple facilities under one structure.

Is restructuring a sign of financial distress?
Not necessarily. In today’s market, it is often a proactive step taken by sophisticated borrowers to protect liquidity and optimise leverage as conditions change.

Do private lenders participate in restructuring existing bank loans?
Yes. Private credit funds frequently refinance or partially replace bank facilities, offering greater flexibility and faster execution for large borrowers.

How long does the restructuring process take?
Depending on complexity, restructuring can take from four weeks to several months. Early preparation, clean documentation, and professional coordination significantly accelerate approval.

Can assets held in offshore or trust structures be restructured?
Yes. Lenders are comfortable restructuring loans held in corporate or trust entities, provided ownership, authority, and compliance are transparent.

📞 Need Help Restructuring Your Debt or Refinancing Existing Facilities?


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We’ll help you protect your assets and optimise your leverage — before the market moves further.