Commercial finance is not one of my strongest areas of knowledge and I was interested in asking about some other rates and products.
I spoke with an old acquaintance today who has moved to a new position with a lender. He told me about a Low Doc Commercial loan they offer and I wanted to know if it was considered competitive…
LVRs went ‘up to‘ 70% and the interest rate ‘started at‘ 8.00%. A lot was dependent on the strength of the deal from a tenant and add back point of view.
Is there anything much better than this out there?
These guys also offered a 95% low doc on residential with a rate in the double digits and they tell me it is very popular.
The Mortgage Adviser
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Essential LinksRobert
There are a couple of lodoc commercial lenders that come to mind but i would consider 8% about right.
Guess it all depends on what security they lend against and what the “from 8% goes upto”.
I have done a couple of lodoc commercial deals over the last 2 weeks so always happy to push business your friends way.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.Richard Taylor | Australia's leading private lender
I like to see a deal or two go through first before I refer people. If anything goes wrong, it adversely impacts on my reputation.
He worked very well and had a good reputation in his former position so I am pretty confident he will do well in his new one. Time will tell.
The Mortgage Adviser
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Essential LinksRob, you can get down to low 7’s at 70% LVR if the deal is strong enough. It is VERY dependent on the individual situation though.
Who does low 7’s? Do they request a heap of evidence to support strength? I am not a fan of commercial loans at all. I try and use residential lending as much as I can.
The Mortgage Adviser
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Essential LinksYes, they do a pretty thorough due diligence, although the process usually onmly takes a couple of days.
So, will you tell us who it is? One of the cheapest Commercial rates around that I know of in retail lending is mid 7’s and that is fully documented. How do you get low 7’s for low doc? I am stunned!
The Mortgage Adviser
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Essential LinksNo I won’t, as my arrangement with them gives me somewhat of an advantage over commercial brokers. I don’t know if they would be of much interest to a full time broker in any case, as their referal fees are not very high. I should stress that such a rate is only possible with a very strong deal, ie 70% LVR or lower, blue chip tennant and long lease.
The major banks will do these types of rates on occasions too, but not often.
Ok. No problem, I am familiar with the better deals for blue chip tenants.
I was asking about a retail shop type investment with a hairdresser on a 3 X 3 year lease in a suburban strip mall.
Would the lower rates still apply or is 8% and 70% LVR good in this type of situation?
I know I can get cheaper with wholesale funding but I am just looking at retail funding.
By the way, I am not a full time broker anymore (or at all).
The Mortgage Adviser
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Essential LinksWhat is the amount they want to borrow and I’ll ask?
It is not a particular question but just to know in general. I was asked this type of scenario a few days ago and was interested to know for myself. Don’t go out of your way for it.
The Mortgage Adviser
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Essential LinksI am the same as you Robert I though we were talking about Joe Blow in the retail shop.
Did a deal with a lender last month for a very strong client and less than 70% LVR with a National Tenant and the deal was set at less than 7% variable.
Those deals are rare and therefore still have interest in your friends product when you get more confidence.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.Richard Taylor | Australia's leading private lender
I agree with APerry.
Which bit Dazz?
The Mortgage Adviser
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Essential Links
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