Mortgage company Firstfolio is operating on borrowed time. The heavily-indebted company's recapitalisation plan did not proceed as planned in January and it is now facing repayment deadlines with two banks and a related party lender.Firstfolio has a A$30.3 million senior debt facility with Commonwealth Bank. Last year the company reported that it risked breaching its loan covenants and was recapitalising the business to inject new equity and reduce debt.An investment company, IZN Investments ACE Management, agreed to invest a minimum of $39.5 million of equity capital as part of Firstfolio's $50 million recapitalisation. The plan was approved by Firstfolio shareholders in November.The investor missed a January 20 deadline for transferring the funds and no new payment date has been set.With the planned recapitalisation still pending, Firstfolio announced yesterday that Commonwealth Bank had given it a waiver from complying with its covenants until April 7.More pressing is a deadline for the renewal of a warehouse funding facility with Westpac. The facility, on which $154.6 million was drawn at December 31, was due for renewal last November.The renewal of the facility was subject to the resolution of the recapitalisation and other funding activities. Westpac has extended the revolving period until February 28 - the end of this week.The company was also due to repay $5.4 million of a $23 million loan outstanding to Welas Pty Ltd (a related party) on January 31. Welas has extended the repayment date to the end of March.At the end of December, Firstfolio had $5.4 million of cash and cash equivalents, and $8.9 million of trade and other receivables.Firstfolio has appointed Grant Samuel Corporate Finance to explore alternatives to the current recapitalisation plan, which looks uncertain. In the meantime, Firstfolio has been losing money. Yesterday, it reported a loss of $300,000 for the six months to December, compared with a net profit of $1.8 million in the previous corresponding period.Revenue was down three per cent to $37.5 million and the value of the loan book fell by two per cent to $18.5 billion.The auditor's report in the December financial report says: "Should a capital raising or alternative transaction to recapitalise the consolidated entity not proceed, the consolidated entity will not comply with its financial covenants and will be in default of the terms of its senior debt funding arrangements."Under these circumstances, the debt providers have the right to require the consolidated entity to repay the outstanding debts on demand."The above conditions indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity's ability to continue as a going concern."