11. Business Purchase

A family who had been operating a regional motel was seeking to purchase the ‘leasehold’ business using equity in a residential property they owned.

The applicants held security property in suburban Adelaide owned by daughter & parents jointly. A formal valuation at $715,000 resulted in an LVR of 58% for the loan amount required.

Applicants provided leasehold agreement, Motel lease, purchase contract, personal banking statements, business IM and Financials. It was agreed to capitalise interest payments for the loan term in order to provide greater cashflow flexibility in the first year of operation under their control.

Exit is planned to be a refinance to ANZ which is currently under negotiation with broker. An alternative option is sale of another investment property held or sale of the security property if need be.

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