All financiers have various options available however in general the following structure would be typical.
Using example 2 from our lending scenarios as a guide with cash provided as equity:
- Borrowing Requirements $925,000
- Most lenders will lend 80% of Unit price on some form of concessional interest rate, linked to their home loan policies.
- With this example they would lend $320,000 on a concessional rate basis with repayments based over a normal home loan term of 30 years. Some financiers will allow interest only on this portion of borrowing.
- Balance of funding $605,000 would then be placed on a business type loan with repayments based on a monthly principal and interest structure to clear loan over the term of the Management Agreement or 15 years whichever is the lesser.
On this basis loan structure would be as follows:
- Loan 1#
- Loan 2^
Please note these are examples only, with banks very keen on the business and packages can be tailored to suite your individual needs.
# Interest only &/or Principal & Interest over 30 years.
^ Interest only &/or Principal & Interest based on term of agreement or 15 years whichever is the lesser.
"I can’t speak highly enough of Barry Maller, at Catalina Finance. Being new to the management rights industry we were on a steep learning curve, but from day one Barry was always on hand to provide exceptional guidance and support. During the selection process Barry’s years of experience and knowledge showed as he considered all the associated risks with each of the businesses. At no time did we feel pressured and we really appreciated his patience and honesty throughout the entire process."
Craig & Robyn - Brissett, Akama Resort, Hervey Bay