Case Study – Directors Loans Cash Out and an Exciting Hotel Project

Case Study – Directors Loans Cash Out and an Exciting Hotel Project

Case Study – Directors Loans Cash Out and an Exciting Hotel Project

Last week we settled a commercial loan facility for a client who had a pretty exciting project in SE Qld.

The client is a long-term hotelier, who specializes in buying old hotels and giving them a new lease on life. With projects and experience across multiple continents, the client takes time to understand the local demographic, works closely with local marketing, design and development talents, and ensures that the hotels re-fit matches perfectly with the aesthetic of the region and requirements of their guests.

Given the current climate, working with a traditional funder wasn’t an option. The client required cash out from the business in order to kick-off their next venture, and the credit policies and timelines that come with working with a bank weren’t something the client was inclined to contend with in a market full of opportunity.

We structured the deal in such a fashion that the client was able to cash out their Director’s loans to the company, enabling them to move on to their next project – you guessed it, a new hotel purchase for future revamp.

The loan was funded against the improved value of the property and over a term of 12 months. This provides the clients with the opportunity to test and prove their current operation before heading to a bank for traditional, long term funding.

Working closely with a private funder from our panel who lives locally to the project, gave the client options around term, rate, and LVR. Something they wouldn’t have been able to achieve through traditional funding. The funder was able to visit the site, understand what the client was working to achieve and could incorporate the client’s requirements around term and LVR into the facility, creating a commercial solution for a commercial problem.

Amount: $1.25m

Purpose: Directors cash out for purchase of next venture

Rate: 10%

Term: 12 months

LVR: 60%

It can’t be ignored or downplayed that Australia is undergoing huge change and that the future is largely uncertain. That said, good business is still good business, and good operators are still good operators. And we are here to support them as best we can.

To talk to us about your next project, get in touch here

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