Just a thought for you guys. I see from various post there are a number of good quality brokers in the forum........
With tight credit in the Comm. Mortgage space there may be a different way of generating the deposit for the comm. property.....
Providing the owner occupier is Business to Business and has debtors and/or inventory a factoring/invoice discounting facility (with/without inventory finance) can generate a lump sum on day 1 of the facility commencing (up to 90% of an outstanding debtor book and notionally up to 60% of inventory). Providing we can show the incoming factoring lenders that the working capital position is not being undermined (usually by showing that only a portion of the lump sum is being used) then the factors can help to fund the deposit...
Here's a quick example
Lets say client debtor book stands at $1.5m
Inventory at $1m
debtor book * 90% - $1.35m
Inventory * 60% - $0.6m
Total facility = $1.95m (please note this represents maximum facility available - with different industries having different "quirks" to reduce it from there)
If commercial freehold was say $2.5m - as professional comm. mortgage brokers you can get 70% comfortably - maybe even 80% (we only focus upon cashflow finance - so don't look at commercial mortgages). Lets say 70% is made available there is a need for $750k deposit. From the factoring facility on day 1 (as per above) = $1.95m - there is still a facility of $1.2m left after the deposit........(Even if this facility were $1.5m - it leaves $750k of additional cashlfow for the client company.)
Whilst the Factoring facility MAY affect interest coverage ratio, and potentially gearing - if the cash position works arguments can be made to lenders all round.......Just some thoughts to get the grey matter working.
Regards
Tim Lea
http://www.cashstream.com.au
[email protected]
Specialist Commercial Finance Brokers for Working capital
With tight credit in the Comm. Mortgage space there may be a different way of generating the deposit for the comm. property.....
Providing the owner occupier is Business to Business and has debtors and/or inventory a factoring/invoice discounting facility (with/without inventory finance) can generate a lump sum on day 1 of the facility commencing (up to 90% of an outstanding debtor book and notionally up to 60% of inventory). Providing we can show the incoming factoring lenders that the working capital position is not being undermined (usually by showing that only a portion of the lump sum is being used) then the factors can help to fund the deposit...
Here's a quick example
Lets say client debtor book stands at $1.5m
Inventory at $1m
debtor book * 90% - $1.35m
Inventory * 60% - $0.6m
Total facility = $1.95m (please note this represents maximum facility available - with different industries having different "quirks" to reduce it from there)
If commercial freehold was say $2.5m - as professional comm. mortgage brokers you can get 70% comfortably - maybe even 80% (we only focus upon cashflow finance - so don't look at commercial mortgages). Lets say 70% is made available there is a need for $750k deposit. From the factoring facility on day 1 (as per above) = $1.95m - there is still a facility of $1.2m left after the deposit........(Even if this facility were $1.5m - it leaves $750k of additional cashlfow for the client company.)
Whilst the Factoring facility MAY affect interest coverage ratio, and potentially gearing - if the cash position works arguments can be made to lenders all round.......Just some thoughts to get the grey matter working.
Regards
Tim Lea
http://www.cashstream.com.au
[email protected]
Specialist Commercial Finance Brokers for Working capital