Forum Replies Created
Hey Toby,
I also had this issue surrounding borrowing capacity of trusts where I received conflicting views, with everyone saying it can’t be done.
I eventually got to the bottom of it, it can be done. You just need to find a broker that understands what they are doing. My broker even sent me screenshots of Bank Policy and emails from CBA and Macquarie Bank, which confirm that it is a legitimate strategy and can be done.
Good luck,
Charlie
Hi Steve,
I find this strange as I spoke to the business bankers of all Big4 banks. I also asked for there managers, which confirmed policy’s that a directors guarantee is a personal liability even for a positive cashflow property.
All banks had similar reasoning, and when I explained to them that I do not have any loans (since the company that owns the trust does), they said that I still have a guarantee which is a liability, as even if it is positive cashflow, if something goes wrong, they will be chasing me. Perhaps this is a case of ‘who you know’, but certainly I am finding it very difficult to find a connection within the bank that will allow me to borrow this money.
You also mentioned a webinar, would you please give more details on date and time, as I would love to join and hopefully resolve some of the obstacles I am facing.
Kind regards,
Charlie
Hi Mike,
Thanks for our phone conversation today, was great speaking to you and absorbing your knowledge.
The link to email you does not seem to be working, do you mind providing me with your email address.
Thanks,
Charlie
Thanks Benny for passing on this information, and thanks Steve for letting me know.
I will be in contact.
Cheers,
Charlie
Thank you Steve for the reply,
I will definitely have to look into the specifics to get a figure for borrowing capacity.
Thanks,
Charlie
Thanks Benny for the reply,
My question was a bit broader, I should have included more detail.
Basically, if a business has acquired assets with its revenue and incurred debt to expand business operations, will the banks still be in the position to lend money, based on the revenue or net worth of assets. So for example, would the business income still be used as a guarantor for the loan if it is theoretically running at a loss (because it has acquired more assets and incurred “good debt” to expand operations).
Obviously, business structures are more complex than just a PAYG income, so I was wondering about the specifics of the lending criteria.
Thanks for your help,
Charlie.
Thank you Benny for this insightful answer.
I am going to continue researching the town and gather the data you mentioned. I have also taken a hard look at the training centre articles, which as well were very useful.
I am concerned though as a lot of online articles mention climate change, and the transformation to a carbon neutral world, so I am in two minds about investing in these areas.
Ideally, I would like to invest in cities close to metro locations, however I cannot seem to find any positive cashflow properties in these areas.
If you ever come across, I would greatly appreciate if you would let me know, as I am really keen to make a start.
Thanks,
Charlie.
Thanks Benny,
I re-read the book and now consolidated my understanding.
I look foreword to applying this knowledge.
Thanks for your help,
Charlie
Thanks Benny,
I received further advice and a second opinion from another lawyer, which did confirm that trusts split asset/control and provide protection from being sued.
I will be more careful in the future when asking these questions, taking chances is not worth it, especially since it could lead to ruin.
Charlie.
Thanks for the reply Steve,
I have sought external advice again and the assets are actually protected in a trust. I am unsure of what the lawyer’s view of trusts is, but I am going to take it that it is wrong, especially since so many people buy properties in trusts specifically for that purpose.
Charlie.
Thank you Finance broker. This helped heaps!
