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Does having a business banker really open up more credit for property?

Discussion in 'Property Finance' started by Moist, 12th Jul, 2015.

  1. Moist

    Moist Well-Known Member

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    I own my own practice/business but am more interested in property. Can using my business banker for property finance really open up more options in terms of finance? or borrowing capacity for property?

    I know it is a very general question and would obviously depend on details....

    Any comments however would be much appreciated!
     
  2. Be Developer

    Be Developer Property Developer Business Member

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    It comes down to

    selection of lender at various stage of property purchase/sell
    structure setup of borrowers
    Broker/banker's knowledge and experience
     
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I doubt it.

    The biz banker is restricted to their own banks products/policy - so once you reach your limits with them.....the door will be closed.

    Cheers

    Jamie
     
  4. Simon Hampel

    Simon Hampel Founder Staff Member

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    I have my own "business banker" for my businesses too and what it actually means is that rather than just calling the bank's call centre if I need something, I have to call my business banker to get my "personalised service" - which in reality means that there is now a "single point of failure" in their customer service offering.

    Their call centre is open until late and on weekends, but if my business banker is in a meeting or is not in the office, I can't get in touch with them. I needed something urgently the other day, but the best I could do is wait for my business banker to call me back. Took them more than 2 days.

    In my experience, business bankers are a complete waste of time (actually worse - they COST you time) for a small business - unless you are large enough for them to come chasing you. They certainly would not know anything about getting property finance - that's a specialised area they wouldn't deal with.

    Just get yourself a good broker.
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Really short answer

    No

    More comprehensive answer is.......................it depends, Biz bankers and premium bankers can be much more creative than their plain home loan resi cousins.

    ta
    rolf
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    As an aside....................... and one I come across every week.

    this could be construed to be poor asset protection ............ convenient yes, simple maybe, best practice split banking and risk management - nah

    ta
    rolf
     
  7. Elives

    Elives Well-Known Member

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    i've watched a video of a property investor recently who was in the stage of acquiring 27 properties and he had a biz banker set up a
    "portfolio loan" i have no idea.. but he said it's like this you get 1 million and then just draw down on it as you need it for the assets i'm guessing its not cross coll. but apparently its a lot easier when your trying to buy several properties a year. and saves time. anyone heard of this?
     
  8. tobe

    tobe Well-Known Member

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    Sure, easy to do for the right client. when would you like me to set one up for you?
     
  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Rolf raises an excellent point - don't combine business and pleasure in the one bank.

    "Business banker" is just a marketing strategy the banks invented - seemingly very effective one as people love to run around saying 'my business banker...' thinking it makes them sound important.
     
  10. OC1

    OC1 Well-Known Member

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    Depends on the business banker "allocated" to you. As a developer I have found it helps a lot. Quick phone call or email and I generally get an answer within the day. As Rolf said some of these bankers can get creative which helps too. One I have used in the past could approve the loan himself, that is, not subject to a credit assessor (up to a certain amount). If it's simple resi borrowing you are thinking of i would just stick with a good PC broker.
     
    Brady likes this.
  11. Bayview

    Bayview Well-Known Member

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    No.

    we have one (due to borrowing level I suppose).

    Tried to do a reshuffle to possibly get a better arrangement to improve cashflows etc.

    Had to get the last 6 months financials together from the accountant to present to the Bank...the Broker saw the figures and said; "Don't even bother - could make things worse."

    This is where I can't understand Banks sometimes; to do this reshuffle would help US a fair amount, and keep their customer in the "safety zone", yet to try and do it would put us in a precarious position with the Bank???
     
  12. Elives

    Elives Well-Known Member

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    "portfolio facility" can you explain how this works as i've never heard of it apart from a interview i saw. is this cross collateralization? what are the pros n cons? does it help with your loan capacity?
     
  13. tobe

    tobe Well-Known Member

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    Indeed. Refinance puts you in a better position. However if you still default you could theoretically sue the bank (or more likely get in trouble with a regulator) for giving you credit when they saw the poor state of your finances.
     
    Elives likes this.
  14. tobe

    tobe Well-Known Member

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    No. It's just doing a lot of securities together. The pros are for people with a bunch of equity spread across multiple securities they can have a global limit to go out and buy more. Cons are similar to those for xcoll.
     
  15. Elives

    Elives Well-Known Member

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    so it's not xcoll but you have similar problems to using it as if u had xcoll the securities?

    so etc say i had 10 cash flow / neutral properties at 80% lends around 200-250k property sale price per property. all separate loans. instead of doing this i used a portfolio facility. how would it work out differently?
     
  16. Brady

    Brady Well-Known Member

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    Sounds similar to 'my broker' quotes.

    OC1 has nailed it on the head, as always it always will depend on the individual not the title.
     
  17. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    A portfolio loan across multiple properties is cross col - plain and simple. Avoid like the plague.
     
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  18. DanW

    DanW Well-Known Member

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    It's xcol for sure, agree with Corey.

    How else could they possibly give out the money with a single limit. Non xcol would need multiple facility limits.

    I've got a mate with something like 20 properties and he was telling me how great xcol is because you can pool all your tiny portions of equity for each purchase. I totally disagree with him but it does go to show there's more than one way of doing things. He's lucky he hasn't come up against major exposure risk from this single bank due to staying low LVR. Personally though it scares the hell out of me to trust one single bank so totally and completely..
     
  19. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    That way is fine until it's not - and when it's not, it's really, really not.

    The problem is, until the proverbial hits the fan it all seems awesome and you're none the wiser as to the risk you're taking. You could literally x-coll for 20 years blissfully unaware of the risks, until the day comes you want to retire and realise you have zero control of your deleveraging.
     
  20. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It must involved crossing if more than 1 property used as security.

    Ask your mate what will happen if he retires and then sells a property? If he doesn't know then suggest he might want to get some advice.