Any lenders that will allow equity release for business machinery?

As per the topic, would any lenders accommodate you releasing equity to make a business purchase for machinery.

A friend of mine is looking to purchase machinery from the US but traditional hire purchase loans are falling through because the lenders are not keen in buying machinery from overseas (want to deal with an ABN). They have however advised that if you can come up with the money and get the machinery delivered, once it arrives they will inspect to make sure it is actually here and will then loan you the money.

So without enough cash or an overdraft the only option is equity but I imagine not too many lenders would be keen on this, particular post APRA where "for future investments" wont really fly.

 

How much is the machinery?

 

Hey Jess,
Around 90k AUD.

 

If his LVR is under 80% there are quite a few that will do it

 

Would NAB be one of those?
And probably more a question for an accountant but I imagine all the same deductions would apply (interest on the loan as its used for investment purposes, depreciation).

The other consideration is doing it this way would that be a problem given the home and business are two different entities? Does this even matter? And if so could you borrow as one entity and then lend to the business?

 

As Jess said - keep the LVR under 80 (out if LMI) and cash outs aren't usually a hassle

 

Maybe he could look at doing getting a temporary business overdraft, and to be cleared with funds from hire purchase when the machine arrives

 

It will have to be secured by property.

 

Short term business lenders do this sort of thing - loan to the business using property (owned by the business, yourself or someone else) as security. We've done quite a lot of these sort of deals.