Will anyone lend us money?

[ali]

Hi all, advice appreciated.
Here's the situation: I want to refinance our PPOR loan so I can get an offset account and also because I dislike dealing with our current lenders.
We may want to keep our PPOR as an IP down the track, which is why I want the offset.
I have approached a few lenders and they are all pretty keen to help, until I tell them that my husband has just started up a consultancy company (with several people) late last year and that is where our income comes from. Then they go cold.

The problem is not our ability to service the loan.
He draws a PAYG income from the company of about $160k +super +novated lease car.

Another $108k (after tax) of his earnings is put through a family trust and I draw that as income.

The PPOR loan is for about $300k.
We also have two cashflow neutral IPs worth about $290k and $240k.


So will anyone lend us money or should we just wait a few years to refinance (by which time the loan will pretty much be paid off anyway)?
Cheers, Ali

 

[Rolf Latham]

depends..................

what consulting means

ta
rolf

 

[ali]

mining engineering.

 

[tobe]

what did he do previous? Is the ABN he uses a new one, or has he had it registered for a while? Does he have a major contract with one large mining company? Are the other directors of the company experienced in the field?what percentage of the combined properties value are you looking to borrow?

 

[ali]

Hi Tobe, same job previously as a PAYG in a mining company. The ABN is new. They have contracts with many different mining companies and can't keep up with the work. They are all highly experienced and highly regarded in their field. LVR will be 80% or less.
Thanks, Ali

 

[Aaron_C]

The mainstream banks won't do this since he hasn't been self employed for at least 2 years. You will have to go for a non-conforming lender - and their rates will be higher.

 

[tobe]

Does the company have any borrowings? The best place to start might be with the bank that provides commercial facilities to the company.

that said there are some lenders that would consider this proposal. It would involve a lot of paperwork, work histories, interim financials, bas statements the whole box and dice. It is a lot of trouble to go to just for an offset account. You might be better off saving in a term deposit for the next couple of years instead of an offset, or simply repay the loan, and re structure your finances with another NG property after you can show 2 years of financials.

 

[marg4000]

Have you approached your current lender about setting up an offset account?
Marg

 

[ali]

Thanks Tobe, Aaron C. I will check with the bank that lends to the company but otherwise, it does sound like it will be more trouble than it is worth. I will investigate the term deposit idea but obviously we will be paying tax on the interest earned.
Thanks again, Ali

 

[ali]

Have you approached your current lender about setting up an offset account?
Marg

Hi Marg, good point. I will ask them.

 

[Lupo]

I think you would have to look at this in another approach and to raise capital within his mining consultancy business, to release the pressure on your net profit.

Very different avenue and much faster.

Before I forget it also matters that, is the business protected by a trust and can the properties be listed within the companies assets? Looking more favourable for investors to provide capital and the next acquisition in motion.

I could go for hours about it this topic, but one thing I learn't a long time ago with businesses and assets, is that never rely on a bank to get funding from.