Client Industry: Retail / Property Investment / Property Development
Finance Assistance: Restructuring - Refinance
Loan Amount: $40m
Even a successful multi-million-dollar business can get caught being over exposed with one lender and not being structured properly to minimise their risk.
A long-standing retail business and property development client of Arete Finance, which has multiple sites across south-east Queensland, required assistance in restructuring their debt to protect assets and minimise bank risk to their main income generating asset.
Their existing bank, a Big 4, had been very supportive however despite their AAA Client rating they wouldn’t release any security across the company’s multiple mortgaged commercial and residential properties. The bank held significantly more property security than they needed, in fact nearly 6 times the amount. The main problem with this was that it put the Group’s main income earning asset & retail business at potential risk. We recommended a restructure of the loans to property security to release the mortgage over the main asset and other prime properties. This ensured that no bank could ever attack this asset & the retail business it operated.
Despite the business performing very well and the advantages presented, the existing bank was not keen to release any security. They just wanted it all!
To provide competitive pressure Director of Arete Finance, Daniel Dumble tendered his client’s requirements to multiple lenders which resulted in the restructuring of finance across several banks which enabled the release of his client’s prime income producing commercial asset giving greater protection. In addition, we were able to negotiate cheaper pricing as well as better terms and covenants.
It saved the client over $500,000 in bank interest and fees over three years.
“Daniel has been our long term commercial finance broker”. He’s as important to me as my tax accountant or my solicitor. Having someone that works for me managing my banks and my loans has been critical in helping us grow.”
This client has been with Arete Finance for 7 years, and together they are currently working on securing finance for other multi-million-dollar acquisitions and developments.
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