Navigating debt finance in 2025: Chris Floreani’s insights on lending trends and capital strategies

From advising on one of the UK’s most ambitious infrastructure projects to guiding Australian SMEs through complex capital raises, Chris Floreani brings a broad perspective to the world of banking and finance law. As the head of our banking and finance team, Chris works with clients across corporate lending, project finance, acquisition finance, and restructuring - with a strong focus on private credit, alternative lending, and strategic support for family businesses and SMEs.

In this Q&A, Chris shares timely insights on the rise of non-bank lending, the impact of regulatory change post-Banking Royal Commission and practical tools like convertible notes that are helping businesses secure funding while maintaining flexibility. Whether you're navigating tighter lending criteria, exploring new funding sources, or structuring your next deal, Chris’s approach is centred on balancing risk, growth and long-term goals.

I worked extensively in project finance in both Sydney and London.

In London, I had the incredible opportunity to work on the financing for the Hinkley Point C nuclear power station, a landmark project that was the first of a generation new build for the nuclear industry in the UK.

During my time in Sydney, I was fortunate to be involved in the financing of a number of social infrastructure projects including the redevelopment of the Sydney Convention Centre.

Since joining DMAW Lawyers, my practice has evolved to encompass a broader range of banking and finance services, including corporate lending, acquisition finance and restructuring. I particularly enjoy supporting family businesses and SMEs in developing strategic capital raising strategies tailored to their unique needs.

I’m seeing a rise in alternative lending sources, with private credit funds and fintech platforms playing an increasingly significant role.

Alternative lenders are offering more flexible terms and faster approval processes compared to traditional banks. These lenders are also more open to considering a broader range of assets as security, including intangible assets like intellectual property.

Additionally, there's a growing trend towards more flexible financing structures, such as asset-based lending, which can be tailored to suit the specific needs and cash flow patterns of SMEs and family businesses.

Overall, this shift is providing businesses with more options and often better-tailored financing solutions, although it's crucial to carefully consider the terms and costs associated with these alternative lenders.

The Banking Royal Commission resulted in more cautious lending practices from traditional banks. Private debt/non-bank lending has taken centre stage to fill the gap left by traditional lending, but ASIC has now flagged that this industry sector to be more heavily monitored and regulated.

Changes are also influenced by broader market trends rather than direct regulatory pressures. For instance, there's increased scrutiny on ESG factors, even if not strictly mandated.

I help clients navigate this landscape by staying attuned to these evolving lender preferences and market expectations. This might involve identifying alternative funding sources that might be a better fit for their specific circumstances.

When acting for a borrower, it is critical to thoroughly understand my client's business objectives and risk appetite – so that we can work together to structure a deal that will allow my client to maintain operational flexibility whilst also providing the lender with appropriate covenants and a suitable security package.

It's about finding the right balance between protection for lenders and flexibility for borrowers. I focus on creating structures that align with the client's long-term strategy, considering factors such as future growth plans, potential market changes and the need for ongoing financial flexibility.

In this climate, it's crucial to have a robust business plan and financial projections. Market conditions are prompting businesses to reassess their debt structures and also explore a diverse range of funding sources.

As a borrower, it is important to start the process of “getting your house in order” early, as lender due diligence is becoming increasingly thorough. By being proactive and flexible in their financing strategies, borrowers can better navigate the challenges posed by market conditions while still securing the capital they need for growth.

I believe collaboration is key to delivering exceptional results. I work closely with corporate advisors (including specialist debt advisors), accountants and other specialists to ensure that all aspects of a transaction are thoroughly considered.

This interdisciplinary approach allows us to provide comprehensive advice that aligns with our clients' overall business strategy and goals. By combining our expertise, we can identify and mitigate risks more effectively, leading to better outcomes for our clients.

Convertible notes have become a popular tool for SMEs and family businesses. They secure funding upfront, with the option for the debt to convert into equity at a specific trigger event like a future capital raise. This can be an attractive option for businesses that want to defer valuation discussions or avoid immediate equity dilution.

Unsecured or subordinated loans from private investors are becoming more common, especially for businesses with strong growth potential but limited tangible assets to offer as security. These tools provide SMEs with creative ways to access capital while balancing risk and flexibility, making them particularly suited to businesses in dynamic or transitional phases.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.