Firstfolio director and shareholder Tony Wales has thrown the mortgage company a lifeline, agreeing to lend it A$29 million so it can repay Commonwealth Bank.Wales' private company Welas Pty Ltd currently provides $29.3 million of subordinated loans to Firstfolio. The terms and maturity of the outstanding loan will be aligned with the new loan, making Welas Firstfolio's senior debt provider and secured creditor.Firstfolio has been grappling with a heavy debt burden for almost two years.The company went on a buying spree between 2010 and 2012 and ended up with a highly geared business just as the housing finance market slowed to a standstill.In October 2012 it announced a plan to recapitalise the business and retire debt. Late last year shareholders voted in favour of a plan proposed by investment company IZN Investments ACE Management, but the investor missed the payment deadline in January.Firstfolio had to seek extensions from CBA while looking for alternative finance, and engaged Grant Samuel Corporate Finance to help with the search.Firstfolio chairman Eric Dodd said in a statement on Friday that the Welas refinancing would address the company's immediate funding needs and give it time to implement a debt reduction program.A company spokesman said the company was now pursuing an "informal process" or investigating alternative funding arrangements.The company has not terminated its agreement with IZN Investments but the spokesman said it was a "moot point" whether that deal could still go ahead, given that it was approved by shareholders last November. The company's circumstances have changed since then.The company is also on the lookout for a chief executive.The Welas loan has a two-year term and an interest margin of 450 basis points over the bank bill swap rate. Firstfolio will pay an establishment fee of $450,000.