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Lending Scenarios

All Banks and Institutions have varying requirements when assessing the amount they will lend on any purchase and the following two examples are provided as a guide only.

Example 1 - 50% of total costs

Purcahse price of Unit:
$400,000
Purcahse price of Rights:
$1,100,000
Stamp Duty, Legals:
$75,000         (estimate 5%)
Total:
$1,575,000
Borrowing Limit:
$787,500
Cash Required:
$787,500
Total:
$1,575,000

Example 2 - 80% of unit cost and 55% of rights

Total costs in line with the above - $1,575,000.

Borrowing Limit

80% of Unit:
$320,000
55% of Rights:
$605,000
Total:
$925,000
Cash Required:
$650,000
Total:
$1,575,000
  • The above examples have been assessed on the basis that you will have cash as equity for your purchase.
  • Most financiers will be prepared to consider other security in lieu of cash equity.
  • When alternative security is offered, serviceability of borrowing amount will be the key assessment.
  • Lending Ratios to 75% of total purchase price are also available with some financiers.

"We felt Barry looked after our interests and were comfortable that he sourced and obtained a competitive deal with the bank. We would not hesitate in recommending Barry to any potential purchaser of a management rights business."

Craig & Robyn Brissett - Akama Resort, Hervey Bay