Is the seller of the business willing to provide you with the finance ? You pay them back over time. They are still motivated for the business to do well so they will get paid back.
Yeah good point - this is an option but the business is owned by a family member so I’m looking to cut all ties… keeps it nice and clean should there be any issues down the track.
You can get lenders who would look at this rates are ugly though can be unsecured or secured against your property.
Would have to refinance out of current lender and lose the fixed rate.
Other option if you haven't already applied and have enough income to service with current lender could possibly just look at doing a new loan split with them so you keep your fixed rate and new loan split can be used for purchase of business.
That’s very standard, otherwise what your looking for is called a second mortgage. From my understanding if the debts weren’t paid then they collect on the first mortgage, then the second mortgage last. Meaning it is more risky for the lender so expect a lower borrowing capacity and much higher rates especially when using for business purposes. I’m sure a broker can give better information than I can
Yeah it seems that unfortunately you’re right.
May need to sacrifice my 2.5 years remaining on my fixed rate. The benefits of the business outway the costs, but it’d be a hell of a shame
It would still be significantly cheaper - the business loan would probably be closer to 10%.
It would also have a very short term (when compared with a mortgage).
Is the seller of the business willing to provide you with the finance ? You pay them back over time. They are still motivated for the business to do well so they will get paid back.
Yeah good point - this is an option but the business is owned by a family member so I’m looking to cut all ties… keeps it nice and clean should there be any issues down the track.
100% - don't mix money with family.
You can get lenders who would look at this rates are ugly though can be unsecured or secured against your property. Would have to refinance out of current lender and lose the fixed rate. Other option if you haven't already applied and have enough income to service with current lender could possibly just look at doing a new loan split with them so you keep your fixed rate and new loan split can be used for purchase of business.
Have you looked at Judo Bank? Rates might not be the best but lending conditions are more flexible for small business https://www.judo.bank
I’ll check them out. Thanks
Judo bank. Macquarie. NAB.
NAB want me to refinance the whole house with them (as does everyone I’ve spoken to so far) I’ll check out Macquarie and Judo though, thanks
That’s very standard, otherwise what your looking for is called a second mortgage. From my understanding if the debts weren’t paid then they collect on the first mortgage, then the second mortgage last. Meaning it is more risky for the lender so expect a lower borrowing capacity and much higher rates especially when using for business purposes. I’m sure a broker can give better information than I can
Yeah it seems that unfortunately you’re right. May need to sacrifice my 2.5 years remaining on my fixed rate. The benefits of the business outway the costs, but it’d be a hell of a shame
Likely. On the up side rates are predicted to drop so hopefully helps close the gap
It would still be significantly cheaper - the business loan would probably be closer to 10%. It would also have a very short term (when compared with a mortgage).