Lending Trends July 2024

This week we look at two recent trends in Private Credit funding: meeting ATO demands and loans on property under call option

ATO Demands

As reported by ABC on 16th July, “ATO issues tens of thousands of director penalty notices that could send more people bankrupt” [source], many SMEs are continuing to receive demands for unpaid taxes, worker entitlements and superannuation guarantee contributions. Company Directors can be held personally accountable for these debts, even years after the fact. We covered more about this in a previous Newsletter here.

For Company Directors with real property equity, business receivables and / or unencumbered plant and equipment, Semper and its lending partners can arrange a stack of capital solutions to meet these obligations and enable a business to trade through.

Generally, Directors are only given 21 days to resolve a Directors’ Penalty Notice (DPN). An experienced lender such as Semper can act quickly to raise funds and remove the ATO threat.

If you have a client who has received a DPN, contact Semper today to see how we can assist.

contract of sale by call option

It is common for developers to acquire properties under a Call Option, retaining the exclusive right to acquire the property in the future while awaiting rezoning or development approval. This is a seasoned practice, but we are seeing an increase in situations where Options are taken against mortgaged property.

In these cases, the Option is secured by registering a charge on the property behind the lender. This maintains the buyer’s interest but also limits the level of debt the vendor can take. As with all commercial agreements, it requires cooperation from all the stakeholders which can lead to unforeseen complexities.

Semper recently acted on behalf of a vendor whose private mortgage expired before their buyer’s Option was exercised. Bank appetite for their loan had diminished and interest rates had grown, so refinance options were limited.

Semper worked with the vendor and developer to renegotiate the Option mid-rezoning, designing the finance package in a sympathetic and economic way that ensured the sale could still complete and extinguish the debt from the first option payment.

If you have a client with an out of the box scenario, Semper has a commercial and rational approach to debt restructuring. Contact us today to find out how we can help.

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Commercial lending

Semper is a leading non-bank lender specialising in property-secured loans to businesses in any industry with loan sums from $250K – $30M 1st and 2nd mortgages Australia-wide up to a maximum LVR of 80%.

Semper offers a wide range of flexible products tailored specifically for you. We specialise in all your short-term and bridging finance needs.

We don’t do loans the banks won’t, but assist when the banks can’t, usually due to timing or circumstance.

COMMON LOAN USES

Rapid property acquisition pending alternate finance;
Managing cash-flow challenges, such as:

  • Tax liabilities and ATO debt
  • Replacement finance or deleverage from an existing lender
  • Pre-insolvency issues/ release from administration and turnaround
  • Creditor payments
  • Release of equity
  • Debt refinancing
  • Seasonal trends
  • Business emergencies
  • Bridging the gap between sale and purchase (residential or commercial)
  • Rapid drawdown and equity release
  • Buying a business
  • Meeting the capital needs of a growing business
 
Semper Secured