balmain + commercial + big deals + august 2008
Office investment
August 2008
| purpose | Provide 100% funding to allow the borrower to purchase a strata titled office in Spring Hill, Brisbane for investment purposes. Office to be purchased was located in the same building as the client’s current publishing business office. |
| loan limit | $472,500 |
| lvr | 75% – Secured against existing unencumbered office and new purchase. |
| loan term | 5 years |
| facility type | Interest only |
| interest rate | Fixed for 3 years – 9.44% (margin of 1.85%) |
| interest cover | Interest cover of 1.8 times (income to interest commitment ratio) was provided based on proposed rental income to be generated from the new purchase and a 3 year average of the clients publishing business. The borrower’s business had only been in operation for a short period so draft financials were provided by the applicant’s accountant to demonstrate servicing. Whilst the borrower’s business was recently established, the client had a long and successful history in the industry having recently sold a similar business. |
The initial approval was for 70% of the combined value of the existing office and the new purchase. When the existing office didn’t value as high as clients expectation, Balmain was able to renegotiate the approval to 75% of valuation to ensure settlement could be undertaken without the requirement of any further capital.
balmain + commercial + big deals + august 2008
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