COMMERCIAL PROPERTY PURCHASE COMMERCIAL PROPERTY PURCHASE

Client Case Study Commercial Property Purchase

Our client approached several banks and brokers to obtain a loan of $1,400,000 to purchase a commercial property. They had difficulty in securing an approval as the structure of the loan would not comply with banks’ lending policies. The unusual aspect of this loan was that the balance of funds was to come from the individual self-managed super fund (SMSF) of 3 directors. Each SMSF was to contribute an equal amount toward the property purchase.

We worked with our client, their solicitor and accountant, and came up with a solution where a new unit trust was established to own the property. The 3 individual SMSFs of the directors invested in the unit trust where the funds were used to assist with the purchase of the property. The unit trust was the borrower and security limited to a mortgage over the commercial property and guarantee from the 3 individual directors. We were asked to exclude any guarantees from the respective SMSF which ensured compliance with the law.

We understood what structure would work for the bank and we knew who to present the scenario to. This format complied with the bank's policies so we obtained the right outcome.

 

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Published: 20/6/2023
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