Looking to buy commercial property, fund business operations or buy business equipment? We'll help you choose the right commercial loan to achieve your goals.
Are you a small to medium business owner who needs commercial finance to grow your business or buy a commercial property?
With over 25 years of commercial banking experience our team looks at each potential finance arrangement from every angle, considering both costs and structure. We understand banking literally inside out.
As a business owner do you have a relationship with your current bank? Do you feel comfortable that your bank manager will deliver?
As Loan Market Commercial Broker of the Year for 2014, 2012 and 2011 as well as being a Chartered Accountant, Grant has the insight and expertise to solve all sorts of complex finance requirements.
Grant’s enviable reputation is that he will deliver the right result each and every time. Our team understands what finance is available in the market place, what is right for you, what is fair and what is competitive.
We help you as a business owner to protect your premise.
The cost of your commercial property loan could be less than the amount you are paying in rent. Are you aware that some banks will lend up to 80 per cent of the commercial property value? With our expertise in the commercial lending market, we understand the key lending criteria of different banks.
Property can be purchased through your self-managed superannuation fund. Trusts can also purchase a property. Separating ownership from your business provides asset protection. We work with your accountant and solicitor to achieve this outcome.
The commercial property market is all about taking an active and selective stance in making the most suitable investment decision.
Understanding your exposure to interest rate fluctuations and the importance of property location are paramount. As an investor you can choose from a variable rate, fixed rate, the combination of variable and fixed rates and principal and interest or interest only loans. Each lender offers a different loan to property value ratio based on property type and location.
Would you prefer to be in an accelerated program which helps you pay off your loan faster or would you rather maintain your current level of repayments?
We can help you develop an interest rate risk management strategy, choosing a loan that suits your profile and reduces the exposure to interest rate fluctuation.
Home loan rates
Did you know that certain banks allow you to purchase a commercial property and only charge you interest at home loan rates?
Whether you are planning to purchase a commercial property or expanding your current business, you can obtain finance at a home loan rate. This only works if you provide your residential property as security.
From a bank perspective your risk profile is enhanced which lowers your interest rate and set up fees. On a $600,000 loan this can provide savings of up to $10,000 in Year 1 and $6,000 each year thereafter.
Knowing which banks offer this competitive advantage and how your application is submitted to the respective bank is the key to sourcing these savings.
Looking to purchase rent roll?
Understanding the value as well as real risk of a rent roll is of utmost importance. We have recently dealt with a client who had an existing property rent roll producing $100,000 income per annum.
The value of the rent roll was $275,000. The agent purchased another rent roll valued at $240,000 making his asset worth $515,000. By way of equity in the existing rent roll the agent was able to borrow the whole purchase price of the new rent roll.
The agent generated an extra $80,000 per annum in revenue versus a cost of only $20,000 in interest and fees. The client ended up $60,000 ahead each year!
As a Business owner, are you looking at financing the purchase of a new business or buying a franchise?
With a business purchase,
- Most banks want you to share the risk by either providing collateral security or contributing cash into the purchase.
- Relevant industry experience and management skills are taken into consideration in a bank’s assessment.
With our expertise and experience on your side, we help you find the right finance solution for your business’ borrowing needs.
We assist you in presenting how you should generate cash flow and profit from the business that you are purchasing and management of the business.
For example, we recently secured a business loan of $800,000 to purchase a business. The client home was worth $1,300,000 and had a home loan of $500,000. That is 100 per cent of the value of the residential property that was secured. We present to the Bank the proposed cash flow, the capacity to repay and reduce debt as well as the client’s strong management capabilities in the given industry.
Case Study 1
Commercial Property Purchase - The right structure produces the right outcome
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 contributions of funds for the purchase was to come from the self-managed super fund (SMSF) of the 3 directors. Each SMSF was to contribute an equal amount.
We worked with our client, solicitor and accountant, and came up with a solution where a new unit trust was established to own the property and to be the borrower. Each SMSF invested in the unit trust where the funds were used to purchase the property. 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.
With the use of an experienced finance broker, your deal will be presented in the right format and to the right people.
Case Study 2
Contacts and persistence rewarded us with the right solution
Our client is a property developer who built a block of 51 apartments. He sold 29 apartments off the plan and was left holding 22 apartments. Our client had a loan of $6,200,000 against an asset worth $10,000,000. The banks were not happy to have 22 apartments in one block as security as they considered it to be a concentration of risk, regardless of the fact that our client was able to demonstrate serviceability. Our client was also paying too much interest and needed to secure a loan which would free up some cash.
As an experienced finance broker, I was able to approach 20 lenders with this scenario. Only one of these lenders was prepared to offer the right solution. They were willing to take on the concentration risk and proposed an outcome which would reduce our client's interest rate from 9% down to 5%. With interest cost reduction, our client was able to save up to $25,000 a month.
Persistence and knowledge gave us the right outcome.
Case Study 3
Client required $800,000 to purchase a split level office and warehouse. For the initial purchase we funded 100 per cent of purchase price and stamp duty.
With usage of the space, the client created an uplift of the value of the property by converting the warehouse into an office. With this uplift of value, he was able to borrow 100 per cent of property value plus stamp duty. No cash was needed to obtain this loan.
Case Study 4
Client owned an unencumbered property worth $1,000,000 in Port Melbourne. This property was tenanted on a 3+3+3 lease at $70,000 per annum plus outgoings.
Our client was able to borrow up to 60 per cent of the property value to fund a separate transaction. The funds were used to finance the development of another site. The bank approved the loan relying on the lease rental and no further financial data. There was no restriction on the purpose of the loan.
How much can I borrow?
Your borrowing power is a critical number to know because it helps you understand how much you can spend on your commercial property. Use the calculator to find out how much you could borrow. We're ready to chat when you are.
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