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Any lenders that will allow equity release for business machinery?

Discussion in 'Property Finance' started by albanga, 10th Sep, 2015.

  1. albanga

    albanga Well-Known Member

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    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.
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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  3. albanga

    albanga Well-Known Member

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    Hey Jess,
    Around 90k AUD.
     
  4. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If his LVR is under 80% there are quite a few that will do it :)
     
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  5. albanga

    albanga Well-Known Member

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    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?
     
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    As Jess said - keep the LVR under 80 (out if LMI) and cash outs aren't usually a hassle
     
  7. imbi3

    imbi3 Well-Known Member

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

    Bayview Well-Known Member

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    It will have to be secured by property.
     
  9. JacM

    JacM VIC Buyer's Agent Business Member

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    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.