A bit stuck...

Hi all. Looking to see if there is anyway forward in my current situation.

PAYG working f/t approx 122k, not including super. Very secure job but often high pressure and tiring.

Own 2 properties including PPOR. Total value approx $2,200,000. Total owing approx $1,250,000. Rental income approx $28000pa, bulk of debt against PPOR. Selling of IP would reduce overall loan to $833k with approx 200k in cash remaining. Debt recycling difficult due to current cash flow limitations.

I have a really great opportunity to get involved in a business opportunity but I am needing approx 200k. Return in vicinity 150k pa. Hoping to use this to fast track debt repayments initially and then drop back PAYG days.

I have a great broker from here who tells me my equity pulls are done for the time being due to servicing but I'm unclear if there are any other options available to me. They have advised that they don't look at personal loans, so I'm unsure where to go for info on this, being mindful of enquiries on my credit file.

I have a business partner who would not be applying for any loans with me as they have their own capital to invest, so I don't think a business loan would work, as I would think it would need to be in both names. I'm wondering if a personal loan might be an option or even private lending for a couple of years. Realise both would be expensive, have used short term private lending previously. It was very expensive ($40k for an $860k loan for 3 months!) so not viable for this purpose at those rates but perhaps there is cheaper around?

I have available some capital in unlisted trusts via a testamentary trust that are looking to list in late 2023 so could potentially sell in 2023 and borrow cash from trust to pay back 200k if ROI can't repay before then. Release of capital is not available prior to this).

Alternatively IP comes off lease in March 2022 so could sell IP then - bit reluctant to sell while tenanted, and would prefer to keep property if possible - good growth prospects and neutrally geared, but aware it is impacting on my serviceability and limiting other investment/development options.

If I go ahead with this opportunity I would need to have the cash to invest in the next couple of months. Any ideas (other than a btc gamble), brains trust?
Thanks.
J

 

Borrow from business partner?

 

Not really an option...

 

you could set up a company to own your share and find someone else to go in with you as a 'partner'. they could get shares in return for lending the company $200k.

 

Thanks Terry. I thought about this but I just don't know anyone with a spare 200k at the moment. :-(

 

I would expect that you'd have to go private funding.

 

That's what I'm thinking too Skater. Not sure about required security for this though (or costs for a longer loan).

As another thought, could I use cash from my superfund? Currently in an industry fund but could convert to SMSF. Value of super $315k. Business partner not related at all. No plans to work in business at current time but may have a desire to, in the future. IIR though, I don't think this would be an option if business funded by super fund (still in accumulation stage). Realise this would change ability to use any earnings to pay down non deductible loans or change PAYG arrangements at the current time though, which would be the ideal situation.

 

Terry, could I loan from SMSF to testamentary trust and then borrow from TT to business? Still in accumulation stage and not sure if this would be legal from SMSF pov. Not even sure if there would be a benefit in structuring this way, just trying to think outside the square (but within the law!!!).

 

no

 

Can you borrow from the TT?

 

Roger that.

 

Bit tricky at the moment as the funds are fairly illiquid. I could try to find a private buyer but would likely have to sell for a reasonable discount. Funds won't likely be listed until 2023.