Commercial & Business Loans

Finance for Commercial Property & Business

With access to a wide range of commercial lenders, we are also able to arrange finance for all of your business and commercial property, motor vehicle, plant and equipment needs.

We specialise in catering for the needs of self employed and business clients through our technical expertise and detailed understanding of all facets of banking.

Some of the Commercial Loans we can provide include:

Term or Instalment Loan
Commercial Bills
Development or Construction Finance
Low Doc Loans
Leasing
Hire Purchase
Finance Lease
Chattel Mortgage
Debtor Financing
Overdraft

Just a few examples of Businesses that we have assisted with Business or Commercial finance include:

Accounting Practice
Aged Care
Agriculture
Building / Construction
Child Care
Finance Brokers
Financial Services / Financial Planning
Franchises
Hotels / Pubs
Independent School
Law firm
Manufacturing
Medical / Dental / Veterinary clinics
Pharmacy
Property Development
Registered Clubs
Rent roll purchase
Retirement Village
Scientific laboratory

Commercial Property Loan FAQs

Term or Instalment Loan

Usually for those businesses with a long term finance need and require a lump sum to purchase an asset, expand their businesses or amalgamate existing debts.

Similar to Home Loans they can be variable or fixed. Loan terms are shorter, however, than a Home Loan and are usually approved between 10 and 15 years.

Repayments are normally principal and interest on a monthly basis but many Lenders are happy to provide interest only repayments for the first 1 to 5 years.

Commercial Bills

Suitable for Businesses and individuals to cover short or long term finance requirements.

A Commercial Bill assists you to raise finance through the drawing and discounting of negotiable bank bills. Interest rates are directly linked to the cost of funds on the money market – the Lender will then add their own margin to this figure. Facility amount is usually over $500,000 and terms range from 1 to 5 years. Can be fixed or floating.

Development or Construction Finance

Available to businesses and individuals who wish to develop a property and the loan sum is provided in progressive instalments as the construction progresses.

Low Doc Loans

Low Doc Loans provide a good solution for those self employed clients, companies and businesses who do not have up to date financial information to support a normal loan application.

Principally an “asset lend”, the interest rate for these loans are generally more expensive than the standard commercial loan.

For more information please contact us below.

Leasing

Car Lease

A Car Lease or Finance Lease is a commercial finance product which enables the customer to have the use of a car or commercial vehicle and the benefits of ownership, while the financier retains actual ownership of the vehicle.

The financier purchases the vehicle on your behalf, and you then lease the vehicle back from the financier and pay a fixed monthly lease rental for the term of the lease.

At the end of the lease you can either pay a residual value (final instalment) on the lease and take ownership of the car, trade it in or refinance the residual and continue the lease.

Car Leasing is suitable for companies, partnerships, sole traders and individuals where the leased vehicle is used for income producing purposes. It is also ideal for employees who want to salary package a vehicle through a Novated Lease as part of their remuneration.

Chattel Mortgage

A Chattel Mortgage is a commercial finance product where the customer takes ownership of the vehicle (chattel) at the time of purchase.

Under a Chattel Mortgage the financier advances funds to the customer to purchase a vehicle (usually directly to the car dealer), and the customer takes ownership of the vehicle (chattel) at the time of purchase.

The financier then takes a “mortgage” over the vehicle as security for the loan, by registering their interest over it with the PPSR.

Once the contract is completed, the security interest is removed giving the customer clear title to the vehicle.

A Chattel Mortgage is suitable for those companies, partnerships and sole traders who use the “cash method” of accounting (they record business income and expenses as and when they occur) as it allows them to claim the GST in the vehicle’s price up-front – ie. in the very next BAS.

Personal Loan / Car Loan

A Car Loan is a personal finance product where the financier lends the customer funds for the purchase of a vehicle, and secures the loan against that vehicle.

A Car Loan is can also be known as a Consumer Loan or a Secured Car Loan.

Under a Car Loan the financier advances funds to the customer to purchase a car. The customer takes ownership of the vehicle at the time of purchase, and the financier takes an interest in the vehicle as security for the loan.

Once the contract is completed, the financier lifts their interest in the vehicle, giving the customer clear title.

A Car Loan is suitable for individuals who wish to purchase a late model car and do not have significant business use of their vehicle or the option of novated leasing (salary packaging).

Novated Lease

Novated Leasing is a method of salary packaging a car, under which an employee leases a car and the employer agrees to take on the employee’s obligations under the lease, paying the monthly lease rentals from the employee’s pre-tax income (“salary sacrificing” this income). If employment ceases for any reason, or the lease agreement is finalised, the Novation ceases and the obligations assumed by the employer revert back to the employee.

A Novated Lease will suit any employee who wants to include a motor vehicle as part of their salary package, so long as their employer offers salary packaging as an option for employees.

Debtor Financing

A facility to assist with cash flow, where funds can be advanced against the debts your clients owe you – without the need for the provision of your home as security.

For more information please contact us below.

Overdraft

The Overdraft facility is a flexible product designed to fund seasonal and or unexpected expenses. Provides a business with the opportunity to help manage cash flows more effectively. Funds can be withdrawn and deposited at any time.

For more information please contact us below.

Market and Risk Analysis

At First Point Group, we finance many property development transactions both residential and commercial. This article outlines a brief snapshot of key areas Lenders consider when approving residential property development proposals.

Risk Analysis

Client/Borrower: Is this a big project for the client? The experience and track record of the borrowers in property development is a key determinant of lender support

Builder: Experience and track record of builder is vital to ensure project completes on time. Are you comfortable as to the track record of your builder and their substance, ability to fund project until the Lender pays progressive draw downs. Have you viewed other sites completed by the builder and the quality of these projects and spoken to people who have used builder?

Construction: Your budget must be robust. Many clients operate in rounded numbers which can be an indication that project has not been costed in detail. I always find this a trap for first developments with cost overruns becoming greater than expected causing pressure to complete.

A fixed building contract is mandatory if you are not the builder. Ensure your costs include GST and that you are aware of any GST liabilities you have and any credits you may be allowed if developing to sell.

Market

Have you spoken to a valuer/trusted agent who can give you a realistic assessment of whether the market is ready for your development. What other developments are coming on stream in your area. Pre sales may be required by the

Lender.

What part of the real estate cycle are we in? Will the development be completed on time, within budget, to the quality stipulated and sell readily to clear the Lenders debt?

Security: From a Lenders perspective, the location, development and design are the key aspects. Does the development fit the area? Will the property sell within the required timeframe?

Interest: Capitalisation of interest is allowed on many projects, but not all. If capping is requested, then the project must be strong across all risk components above. Is there capability of the client to cover interest if necessary?

Please contact Peter, Simon or David on (03) 9882 2500 or contact us below.

When is a pre-sale really a pre-sale?

One of the key criteria to meet with most Property Development/Bank Lenders is pre-sales. Likely one of the banes of a Developers life other than accessing funding for the project but the two do run “hand in hand” with pre-sales required to often get a start at obtaining finance in most cases.

But when is a pre-sale really a pre-sale and meet the Lenders pre-sale requirements?

In most cases the Lender will require you to hold a 10% cash deposit with an executed contract for it to be considered a qualifying pre-sale. If you have any contracts with a 5% deposit, you may negotiate to include these as qualifying pre-sales, but you need to discuss this with your Lender before making the sale and accepting 5% deposits on contracts. The sale also must be at arm’s length, where the seller and purchaser act independently of each other.

One of the major variances between the various Lenders and their pre-sale requirements is to do with foreign non-resident purchasers. A few of the Lenders will allow around 20% – 25% of your required pre-sale coverage to be from foreign purchasers, whereas others will often refuse to allow any pre-sale contracts for foreign purchasers, as they argue it is way too difficult to pursue them offshore, should settlement not proceed for any reason.

Some other common pre-sale hurdles include:

Multiple sales to a single purchaser – often a maximum of two sales per individual or entity unless capacity to complete is demonstrated to bank
Settlement date on contract must be a maximum of one month post the notice of completion or issue of strata titles.
Sunset (or termination/recession) date must be a minimum six months post acceptable schedule for practical completion.

You need to consider you are targeting the right qualified pre-sales that are moving you closer towards overcoming your pre-sale hurdles put in place by your Lender?

Please don’t hesitate to call Peter, David or Simon at First Point Group if you need any assistance with development funding on (03) 9 882 2500 or contact us below.

Finance for Rent Rolls

We can provide finance for the purchase of a rent roll. Click Here to read more.

Finance for Financial Services / Financial Planning

We can provide business finance for Financial Services Professionals / Financial Planners to invest in business. Click Here to read more.

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Finance for Commercial Property & Business