Question: Is it possible to get a business loan on a residential property at home loan rates?
Answer: A full document company loan with ABC Pty Ltd as the borrower, Mr and Mrs D, as sole directors, shareholders, and guarantors up to 80%, on family home owned by Mr and Mrs D.
Call us, it may be possible!!
Examples of what may be done:
Providing lender has residential security they will lend for nearly any purpose!!! Here are some examples:
Example 1.
Residential security property – $850,000.
LVR required – 90%
Loan size – $765,000
Purpose:
Refinance existing residential mortgage – $300,000
Purchase commercial factory for business – $465,000
Total loan – $765,000
Lender not only did this, but split the loan over two borrowers (individual and company name) allowed a 90% (inclusive of LMI, LVR), but also gave home loan interest rates on both splits and a 30 year term on both splits as well (with a five year interest only period….)
Example 2.
Residential security property – $850,000.
LVR required – 90%
Loan size – $765,000
Purpose:
Refinance entire commercial portfolio
Commercial overdraft – $200,000
Term Loans – $450,000
Hire purchase, leasing and credit cards – $115,000
Total loan – $765,000
Lender did this by utilising an Offset Account and fixed rate loans. The Offset Account and various fixed rate loans at residential rates. Utilising a 30 years term on all accounts with a five year interest only period this not only saved the client more than $24,000 pa in interest but also delivered more than $70,000 p.a. cash flow back into the business
Example 3.
Residential security property – $850,000.
LVR required – 90%
Loan size – $765,000
Reduce existing commercial mortgage of $1.0 million to $235,000
Client had a $1.0m loan over a commercial property at commercial rates. By utilising lenders resi rates (and terms) for resi properties the lender allowed a reduction of $765,000 over a 30 year term (5 years interest only) at home loan rates.
Whilst client still has a $235,000 commercial loan at commercial rates the lender not only saved him more than $66,000 in interest but also injected more than $72,000 pa in cash flow back into the business
In conclusion, if you are looking for a commercial loan at home loan rates, call us. Remember, in this instance the rate is determined by the nature of the security, not the purpose.
