Industry: Shop Fit out / Construction
Time in Business: Family Trust with a corporate trustee ( Sole Director )
Client Requirements
Client Required urgent finance approval. Client had been previously dealing with another broker for 6 weeks who had not yet been able to get an approval in place. Client approached us on the recommendation from the vendor as we assisted him with the finance for the truck purchase when it was brand new. Client required approval within 10 days to ensure he can start on site training with Holcim. Applicant also has 20% deposit available. Lenders see this as a new business venture
A change in accountants resulted in amendment to trust deeds being missed meaning
current trust deeds were out of date.
Private Sale Purchase
Our Solution
Our approach is to always ensure we have a complete understanding of how the business currently operates, by doing this we found out that the shop fitting side of the business predominately operated at night with the work being completed by Sub Contractors and overseen by the business director and his partner. From here we were able to ascertain that the truck purchase would have limited impact on the business’s current income and the purchase of this truck was to actually diversify the business so that it was able to generate income day and night.
Having determined the businesses current income stream was not going to be affected we would be able to use the current financials of the business to confirm loan servicing which would streamline the loan application. We were now not relying on projected income to cover the proposed new loan repayments.
Once we received the current financials, we discovered that there had been a changed to the beneficiaries of the trust and an amendment to the trust deed had not been lodged. To ensure there was no delay in obtaining an approval we worked closely with the accountant to ensure a letter could be provided to confirm who the correct beneficiaries were and that it matched the current financial statements while also confirming that an amendment had now been lodged.
Overall, the director of the business was largely asset backed with over 50% equity in property and good cash in bank which provided a solid fallback position. 20% deposit along with the income being generated by the business allowed us to overcome any concerns the lender had in regard to this purchase being a new business venture. We achieved a conditional approval subject to the amended trust deed being provided for the client within 4 days. This time frame ensured that the client could meet the requirement to start training with Holcim. Loan was approved based on 20% deposit over a 5 year loan term with 30% residual. Loan settlement was completed the day Holcim Training finished.
Broker
Matt Ingram
