allo allo
can one of the many mortgage brokers, financial advisors, and those of more knowledge than i, give me some specifics..my wife and i are looking at purchasing a business to create more cashflow for our cf+ property investing, the questions are,
what sort of LVR do most banks work with for business loans?
what sort of interest rates?
what sort of loan term (length)?
any other secrets i should learn about?
if i can get some relatively up to date, accurate figures from those of you who have dealt with or are aware of them, that would be great. trying to do my sums on some businesses.
cheers [8]
Hi there
I will have a better look today at work but I am pretty sure the usual LVR for business loans are the same as normal loans. Depends what business it is….
Is it a company? Partnership?I’ll get back to you tommorrow…
EL
It depends on the security. Most banks have business type loans at slightly higher than normal rates, but these must be secured on property.
Then there is the option of just using a LOC secured on your home. These can be as low as 6.47%, but most lenders will not lend if you say the money will be used for a business (due to the high risk).
It is very hard to get a loan secured on the business only. It can be done for some of the big franchises apparently. These loans are like personal loans and the rates are high.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Ryanmel,
I’d agree with Terry & say that the line of credit is the most popular way of getting a loan “for investment purpose”, but you cannot tell the bank it’s for business.
I once secured a business loan for a Bakers Delight (franchise bakery) store. It was standard home loan rate + a margin, somthing like 9.5% in 2002. The term was 5 years, max. the lender would consider was 65% LVR. No property security involved, just secured against ” business assets” – ie- equipment, business etc.
Generally, if you want a business loan, you’d be dealing with the commercial branch of the bank, & they’d ask you for very detailed information & proof regarding the business income, profits & taxation returns.
hope this helps[^]
Hi,
If it is a business with a property then 70% LVR at about 7.5-8% should be attainable, but as UraneHan says, they’ll be quite nosey about the business’ financials.
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Mel
[email protected]
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