Their interest only loan, with capitalised interest, was structured with a sell-off and repayment plan that gave the business ongoing cashflow to fund its next project.
Snapshot
| Borrower Rate % | 9.95% |
| LVR % | 70% ex GST** |
| Loan $ | $5,950,000 |
| State | Vic |
| Property Type | Residential |
scenario
Our borrower in this case was a developer, successfully completing blocks of apartments in metropolitan Melbourne. Their initial bank funding loan had come to the end of its term before they had completed selling all of the apartments.
They had another development commencing and sought a release of capital against the residual stock, pending sale. Semper was able to finance the residual stock secured by first mortgage position, providing the capital they needed quickly.
Their interest only loan, with capitalised interest, was structured with a sell-off and repayment plan that gave the business ongoing cashflow to fund its next project. As the apartments sold, the loan was partly repaid until the LVR reached 50%, after which time up to half of the sale price of each apartment was released to the borrower, giving them further cashflow.
lessons learnt
Semper’s interest only loans can include capitalised interest for term, so borrowers can maximise their cashflow short-term, or they can choose to service which will reduce interest charged.
At Semper, we are seeing an increase in residual stock opportunities across the Eastern Seaboard.
What we are looking for in determining appetite is the pattern of sales by date and sale price, which we compare with other comparable properties in the same area.
** Another key issue for brokers to be aware of is GST. All residual stock LVR must be ex-GST because the lender is liable for GST on sales in the event of recovery. So, a 70% residential LVR must be based on an ex-GST valuation.
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
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
CAPITALISING ON AN UNEXPECTED OPPORTUNITY
- 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
