business loan

We have a business loan P&I $150K with NAB secured against PPOR. Current rate 6.82%.

What other options are available for a better rate.

 

A LOC @ 5.??% then on-lent to your business?

Probably save you $30 per week for a 1% rate reduction. Less account or package fees.

Is it worth it?

 

Just about anything...... Nab have interpreted the law to say that if a loan is for business purposes the rate has to be high, no matter the security. Most other lenders will give you a better rate if the loan is secured by residential property.
Not all lenders will refinance business debt however. citibank, suncorp, rams, pepper and liberty are the ones I can think of off the top of my head, all at their normal residential rates.

 

As it's tied to your PPOR - there would be sufficient equity to refi, then onlend the funds personally between yourself and the business entity.

Should be able to save well over 2% on rate. Have been doing this quite a bit of late, as many business owners are stitched up by their local business banker lacking creativity.

 

How much is lacking creativity as opposed to maximising profit margins...

Absolutely should be able to get a better rate than that in current environment though.

 

Many banks won't lend on residential rates where the funds are being used for business. I have heard of one lender that approved a refinance and then pulled out at settlement when they found out it was a 'business' loan.

I also had a problem recently doing a refinance of residential loans because the statements listed the loan being refinanced with as 'business overdraft'. the new lender was CBA.

 

But there are several who will lend up to 500K for business use, at resi rates.

 

Plus no reviews, requests for financials etc from the bank going forward

 

Exactly - had this exact conversation with someone recently. They were concerned about tying their business to their PPOR (they already had it guaranteed so it was already said and done)

In reality the switch allows them to become the lender to the business - I can't see them enforcing any clauses on themselves to put themselves in negative position, unlike banks.

 

Anyone but CBA, Nab or Westpac for this. No coincidence that the 3 biggest commercial lenders do not allow commercial loans to be cannibalised by their resi arms.

 

Citibank with loan statement in business name?

 

Can you be a bit vague when starting what the purpose of the LOC is for? Say investing purposes.

 

Note always. Probably got into a pickle once the settlement agent had to liase with the outgoing banks business banking area.