I have finished reading Steve's latest book and I am curious to know more about company finance.
He states he has used multiple companies trusts to buy properties. ie 16 houses 4 in each company trust.
He says that this enables him to borrow alot more as opposed to it being in your own name.How is this so? I thought figures were figures?
Figures are figures!
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
So its not entirely true then?
Errrrr Nah actually erodes your borrowing capacity over time.
In saying this certainly has a place as is important entity structure for buying properties.
Richard Taylor | Australia's leading private lender
fredo,
Some investors will borrow under different companies and specify different directorships with different banks.
If the bank asks you what companies you are associated with and all the loans you guarantee, then you have to advise them.
In some cases though, the bank will never ask, and therefore occasionally people get away with perhaps more finance than they would have if they had disclosed everything.
I should add, it is the responsibility of the banker to do the proper checks and ask the right questions but I think it is best to disclose everything to your financier up front in any case.
YI i agree it is the responsibility of the banker to do the proper checks and ask the right questions.
However it is also the responsibility of the applicant to answer the application form truthfully and correctly.
As Terry and i discussed last week we couldnt find a lender who didnt ask the question "Do you guarantee any other loans in the capacity as a Director / Trustee".
Richard Taylor | Australia's leading private lender
I agree Richard.
And in respect to finding a "lender" who doesn't ask those questions, you probably couldn't.
If you looked for specific individuals within those organisations who don't ask the right questions – they are everywhere!
In terms of standard application forms, I don't think ours have it written…? Most probably do though.
And once again, I DO NOT advocate lying or "hiding the truth" from your lender…. ever
I think yours does under the Statement of Position question.
Richard Taylor | Australia's leading private lender
The S/P covers off on any other personal guarantees, but not any other directorships.
I suppose the only time this would be an issue is if you had funded through a company and not given a director's guarantee. Uncommon, but not unheard of.
S/P for reference – http://www.nab.com.au/wps/wcm/connect/1770e1804bc621c4931f932345045098/Cust_SP.pdf?MOD=AJPERES&CACHEID=1770e1804bc621c4931f932345045098
No agreed just couldnt name the last time i ever did one.
Guess if you came up on the Corporate Credit Search and you hadnt ever provided a PG for the Company loan then no reason to disclose it as you wouldn't be personally responsible.
Done it with some Unit Trust Commercial lending but not with a Pty Ltd.
Richard Taylor | Australia's leading private lender
YoungInvestor wrote:The S/P covers off on any other personal guarantees, but not any other directorships.I suppose the only time this would be an issue is if you had funded through a company and not given a director's guarantee. Uncommon, but not unheard of.
S/P for reference – http://www.nab.com.au/wps/wcm/connect/1770e1804bc621c4931f932345045098/Cust_SP.pdf?MOD=AJPERES&CACHEID=1770e1804bc621c4931f932345045098
Directorships don't really matter with declarations as there may not be any loans associated with the company. But they will come up on the person's credit report and the lender will probably do a credit check on the company. If the company has loans that the director didn't guarantee these may be taken into account. There could be loans the company too out before the person became director for example.
Even if you had been a director and given a guarantee and then resigned as director the bank will know about the guarantee from the credit report. I suppose the more loans there are listed on the report the harder it is for the lender to keep track of and take into consideration too.
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
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