Alternative financing – An Appropriate to Finance a Construction Project

It goes without saying that no construction project, especially those that are large in scale, can be carried out without requisite financing. The construction firm which is in charge of the project needs to be capable enough to cover the costs incurred by each participant in the project.

When it comes to project financing, traditional financing institutions such as banks layout strict guidelines and regulations and become a bit cautious in their lending practices. This makes it difficult for contractors to access to additional business capital. Further, the approval process that a traditional bank offers is lengthy, and often takes months.

This is where alternative financing comes into play. The alternative financing firms are positioned to assist construction business owners in obtaining additional working capital to meet the expenditures to be occurred due to unforeseen delays, equipment failure and other such challenges.

Alternative lending firms assist their clients to obtain project finance to meet all the cash-related requirements during the project. Such firms offer a wide range of financing options, they make the contractors avail of a financing option suiting their requirements. Further, they do not demand a list of credentials; the application would be approved within a couple of days or even hours.

The alternative lenders can provide the loan you are seeking despite of you bad credit, thereby enabling you not to stop working upon your projects.

Along with financing a project, an alternative lending firm can provide value add development finance services.

Approach a reputed alternative financing company in Australia to get to know the complete process. If you have found this piece of writing informative, then we will appreciate you for sharing it with others. And if you have some other tips that we might have missed in this write-up, then make sure to provide us feedback so we can improve. 

Four Reasons Why Alternative Financing Is the Preferred Option for SBOs

So, you, the small business owner, is out to get some great financing options but don’t want to get baffled by complex loan procedure of conventional banks. If yes, alternative financing is the right option to opt for.

Here we are discussing why small business owners are inclined towards alternative financing options these days.

Less rigorous qualifications

It is quite easier to obtain loan through alternative options. All you need to prove that you are responsible enough to repay the amount. You need not to show your credit history or stuff like that to prove your repaying capabilities.

Owing to less stringent qualifications, alternative lending has becoming quite popular among small business owners who usually do not have excellent credit history and documents.

Plethora of options

Conventional banks prefer to give out business loans of $200,000 or more, not less than that. This becomes difficult for business owners who need small amounts of cash at different times. A business line of credit enables the borrower to make payments based on the amounts of money borrowed. This makes it much more ideal for business owners who tend to deal with random expenses. Alternative financing comes with a number of investment options and packages.

Lower Interest Rates

The alternative lending market is competitive that drives lower interest rates. Alternative lenders typically have access to a number of borrowers which ultimately make them offer lower interest rates for loans.

Quick Approval Process

It goes without saying that conventional banks have lengthy, painstaking approval process as there are multiple eyes to analyse every application. Meanwhile, alternative lenders can approve a loan within hours due to less paper work and requirements.

So these are the benefits you can avail of if you go to a reputed alternative lender for SMSF property investment loan and other loans related to your business.

Commercial Mortgages – Things to you should know

Whether you are moving to bigger office or simply expanding your commercial portfolio, commercial mortgage is a straightforward way to do so.

Commercial mortgage is basically a mortgage loan used to acquire, refinance, or redevelop a commercial property such as office building, shopping center, industrial warehouse or apartment complex.

Commercialmortgages are structured in order to cater to the needs of both borrower and the lender. The loan amount includes terms like interest rate, term (sometimes referred to as the “maturity”), and prepayment flexibility and amortization schedule.

Lenders who want to be assured that their principal is safe, or want to gain a competitive rate of interest consider commercial mortgage suitable.

Here are some benefits of commercial mortgage:

Lower interest rates – Commercial property mortgages usually have lower interest rates. With fixed monthly repayments, you can use the amount in your business planning and forecasting.

Capital gains – When you buy a commercial property, you make a substantial capital gain this helps you realize capital growth over a longer period.

Renting potential – If you have a property, you can monetize it by renting out.

Financial planning – The payment plan of commercial property mortgage extends for a number of years, which make you concentrate on different aspects of your business instead of generating capital to pay off the loan on urgent basis.

If you are willing to extend your commercial property portfolio, you better approach an alternative lender for commercial mortgage.

An alternative mortgage provides loan even you have a bad credit history and a simpler process than what a traditional bank offers.

Take a look at what possible loan options can an alternative lender may provide you:

• Interest-only or Principal & Interest loans
• Variable or fixed rates
• Full doc
• Low-Doc (no financials required)
• Construction loans
• No-Doc (no documentation required)
• Loan splits

Approach a reputed alternative lender to make the most of the commercial property trends in Australia.

Advantages of Buying Property through SMSFs

Today, an increasing number of investors are buying property through Self Managed Super Funds (SMSFs). After legislation changes in Superannuation Industry Supervision Act (SIS ACT) in 2007, your self-managed Super Fund can be used to borrow funds in order to purchase a property of any kind – from residential, commercial, to rural.

The changes introduced to legislation allow Self Managed Super Funds to borrow money, as long as an acceptable structure was utilised.

SMSFloans basically are ‘Limited Recourse’, that means the lender cannot have any asset acquired through the Self Managed Super Fund other than the property provided as collateral. Simply put, the rights of the lender against the super fund in the event of the facility defaulting are limited to the security of property.

In this article, we are discussing the advantages of buying property through SMSFs.

There you go.

Advantages

• If you buy a property with your super fund, hold it until you retire and you come under the pension phase; as you will need not pay tax on capital gains, whether you sell, rent or hold the property.
• Before retirement, rent and capital gains earned by the SMSFs are subjected to be taxed only 15 percent. And if you hold the property for more than a year, the tax rate would be dropped to 10 percent on capital gains.
• You would get direct control of your super investments and understanding of where the money is being invested.
• Diversification in your portfolio
• Expenses such as interest can be claimed as tax deduction
• No capital gain tax on sale of property if sold during pension phase
• Wider investment options and control over your future
• Funds can be paid out or borrowings reduced at any time
• Funds can be used to acquire property for a greater value than that of the funds’ ‘Net worth’
• All Self-Managed Super Fund assets are safe and cannot be violated by any lender owing to the limited recourse provisions in section 67 (4A) of the SIS (Superannuation Industry – Supervision) Act

Here are some features of Self-Managed Super Fund loans:

• Residential property borrowing up to 80% LVR and up to 30 year terms
• Rural Property up to 65% LVR and up to 20 years
• Commercial property up to 70% LVR and up to 20 years

Depending upon the facility, rate of interest varies.

You can approach an alternative lender like Global Capital Commercial to understand the benefits of SMSFs.

Everything You Need To Know About Second Mortgage

In this blog, we are discussing what exactly a second mortgage is and why it is used.

What is a ‘Second Mortgage’?

A second mortgage (junior-lien) is a type of subordinate mortgage made while an original mortgage is still in place. Let’s say, you secure a loan using the property as collateral for the second time and the first mortgage is still in effect. Home Equity Lines Of Credit (HELOCs) and Home Equity Loans are common examples of second mortgages.

Why does it come with a higher interest rate?

In the event of defaulting a payment, the original mortgage tends to receive all proceeds from the liquidation of the property until it is reimbursed completely, then the second mortgage gets repayments. If there is not enough equity to pay off both the loans, the second mortgage lender is at the risk of not receiving the full amount owed. This is the reason, why the interest rate for the junior-lien is way too higher than the first mortgage.

The first mortgage is basically used for buying a property. The second mortgage is utilized to meet expenditures that are beyond to be financed such as funding a child’s school/college fees, buying a vehicle, or repaying other outstanding debts.

Why is a second mortgage preferred?

Second mortgage is usually obtained to meet the following purposes:

• Merge other higher interest debts into a single lower interest payments
• Creating a Home Equity Line Of Credit (HELOC)
• Home repairs & renovation
• To avoid paying PMI on their first mortgage

If you are looking for a second mortgage, you should approach an alternative lender like Global Capital Commercial. The company ensures to provide the best possible solutions related to the Second Mortgage, while ensuring fast approvals and competitive interest rates. GCC offers second mortgages up to 80% LVR with very competitive pricing.

For more information or apply for the loan, contact the company immediately. 

A Thing or Two about Property Development Management Services

Property management is basically the operation, control, and oversight of real estate. It encircles processes, systems and manpower that are needed to manage an acquired property, including acquisition, control, accountability, responsibility, maintenance, utilization and disposition.

It also refers to the management of personal property, equipment, tooling and other physical capital assets that are used to build, repair, and maintain a property.

Responsibilities of a property development management service provider include:

• Conducting a comprehensive screening or testing of an applicant's credit, rental history, criminal history and ability to pay
• Preparing lease contract and accepting rent using legal documents approved for the area where property is located
• Providing mitigation and remediation related to maintenance issues
• Preparing and maintaining necessary records for tax and legal purposes
• Providing expert oversight of all phases of the development process, straight from project advisory, feasibility planning to project closeout

A development management service provider uses advance technologies to carry out complex projects – ground-up construction to build-to-suit or redevelopments.

Project development services include:

• Planning
• Complex analysis of the project
• Investment development
• Development advisory and management
• Redevelopment
• Development feasibility studies
• Construction financing and management
• Build-to-suit development
• Site search and acquisition
• Strategic resource management
• Market research and demand analysis
• Quantifying and managing development risk through determining variables like construction time, cost and sales values
• Project structuring and financing – securing different funding options with banks and alternative lenders
• Project plan and programme establishment – identification, analysis, management, delivery of project in order to ensure success of the project and outcomes

For more information about the development management, consult a reputed company like Global Capital Commercial. The company has a proven track record of delivering commendable property development management services to property developers across Australia.

Global Capital Commercial has an unwavering reputation for providing holistic and integrated services aimed at maximizing profits and proliferating returns. 

Top Four Types of Property Development Finance

Being a property developer, landlord or investor, you must always be looking for a good property development finance to fund your projects. In this blog, we are discussing top four types of property development finance solutions that you can go for. (While choosing a solution do keep your project’s needs and your terms & conditions in check).

Commercial mortgages

Commercial mortgages score brownie points when you need to purchase any commercial property – shops, offices, warehouses and other such property that is not counted as a commercial one. This type of financing solution works the same way as private mortgages, enabling you to spread the cost of a large purchase over the time.

Commercial mortgages are mainly applied by existing businesses who want to buy their own premises, where the business runs from.

For example, a physician can spend a small fortune on rent, but can’t afford to pay outright for the building he has clinic in. It is sometimes possible to secure 100% finance through additional security.

You can approach an alternative lender like Global Capital Commercial to get to know more about commercial mortgages.

Bridging finance or development finance

The next type of funding solution available is bridging or development finance. This refers to any short-term funding that helps you cover building and development costs. The bridging finance is determined on how ‘heavy’ your project would be.

Auction finance

Auction is undoubtedly a quick and simple way to get a property at an affordable price. There are some alternative lenders specialized in auction finance. You can seek an urgent fund from such lenders, as once you have made the winning bid, you are required to pay the amount within 28 days (depending upon the determined terms and conditions for the property being auctioned).

An alternative lender, like Global Capital Commercial, helps you secure the amount in a seamless manner even within a week. 

What Are The Benefits of Short-Term Loans?

Short-term debt can be defined as a loan for a period of one year or less. Businesses rely upon short-terms loans to meet immediate requirement of buying equipment, expansion and other urgent requirements. In this blog, we are providing you top three benefits of short-term loans

Operating Capital

Operating capital refers to cash available to pay for the day-to-day operations of business, and is obtained from the revenue generated by business operations. What if a business could not generate enough revenue to meet daily operations? In such cases, small business loans help businesses meet their operational needs in an efficient manner.

Emergency Funding

There are times when a business has to tackle issues like emergency funding. And there is no way a business manager can plan for every possible emergency situation like urgent purchase of an equipment, a loss in business, replacement of hardware, and others circumstances that need immediate funding. Short-term loans assist it in dealing with issues of emergency funding. If you are looking for a short-term loan so that you can meet your businesses emergency funding needs, approach an alternative lender.

Expansion

Every business needs to be expanded along the line. And expansion of a business needs funds. Short-term loan provides a business with ready cash that helps it to initiate an expansion program. For example, short-term debt can be used to lease additional space to house the business' growing operations.

Here are some benefits of short-term loans

• Less Interest
• Lower Interest
• Credit Score Boost
• More Equity
• Easy way to meet urgent fund requirements

Approach an alternative lender to understand terms and conditions of short term loans. An alternative lender would understand your business requirements and provide you best possible solution. Further, the interest structure would be tailored according to your business requirement.

Different Ways to Obtain Property Finance

Are you looking for a property loan, but don’t have sufficient documents? If yes, you should better approach an alternative lender who can offer you several funding options suiting your requirements. Here, we are providing you snippets of few such alternatives.

Full Doc

Full Doc is an ideal funding option for those who can demonstrate serviceability, requiring a minimum of 2 years financial statements and tax returns. In order to get a loan through this method, you are required to have a clear credit history. Approach an alternative lender offering flexible funding options to avail Full Doc property finance.

Lite Doc

Lite Doc is the option for borrowers who fall just outside the Full Doc criteria mentioned above, but are able to demonstrate serviceability by providing information related to rental income, BAS statements, interim financials and projections.

Low Doc

Low Doc is recommended for the borrowers who are unable to demonstrate serviceability, but can provide accountant’s letter stating that they can service the debt and the borrower is expected to self-certify their income.

No Doc

This method of funding is considered ideal for the borrowers who are unable to provide any income verification or obtain an accountant’s letter confirming their ability to service the debt. If your case is similar to this, approach an alternative lender to get to know more about No Doc funding option.

When it comes to alternative lender for property finance, Global Capital Commercial (GCC) is a name to rely upon. The company is one of Australia’s lending providers offering property finance solutions suiting your all requirements.

Owing to its network of more than 250 lenders including bank and non-bank lenders, GCC can help you with a myriad of funding solutions including development finance, commercial loans, specialized facilities, credit enhancement strategies, Mezzanine Debt/Bridging Facilities and Short Term Loans.

You are suggested to approach Global Capital Commercial (GCC) to get to know more about their various property finance solutions.