Commercial Property Loan, Melbourne City Fringe


  • Our Client was the founder of an Engineering Service Business, and was nearing retirement age with plans to exit his business at an attractive valuation
  • He wanted to purchase a commercial investment property in Melbourne’s city fringe that offered a strong yield as well as capital growth. The property would form an “inter-generational asset” for the client’s family and he was seeking a Commercial Property Loan to fund the deal
  • The client was particularly strong financially, and operated a very successful business. The client was able to offer a 40% deposit for a $4M+ asset. Thus the transaction was more about securing the most competitive terms for the deal with a mainstream lender.


  • The Commercial Property was being purchased with vacant possession. Therefore no rental income could be attributed to the asset from the bank’s perspective for serviceability purposes at time of purchase. An extremely harsh assumption
  • The client ran his business with 3 other directors so all income flowing through the financial statements had to be divided by four after a detailed assessment. A lender also had to be convinced to attribute the profits to servicing, not just the client’s drawings. We also had to make sure that no GSA would be taken over the primary business. This was completely off the table as a deal term
  • The client’s income flowed through a family trust and then to the corporate beneficiary and then to the wife. The bank required the wife to be a guarantor to the deal structure
  • The client exchanged without a pre-approval and without a cooling off clause – so we had a live contract that we had to secure a loan for!


  • We moved quickly to assess the client’s servicing income from the business, and made our case that our client’s share of profits were sufficient to service the Commercial Property Loan despite the current vacancy in the property
  • We prepared a credit memo which we circulated to our Commercial Lending Panel, focusing on the Big Four plus Macquarie, Suncorp and ING. For this particular deal, we found NAB and Suncorp to respond the quickest. They also have appetite for a standalone Commercial Investment Property
  • We proposed both lenders to our client. However, Suncorp had the added benefit of being able to offer a 25-year loan term with an offset account. While the NAB interest rate was slightly lower, it could only offer a very short loan term of 12 – 36 months given the current vacancy, despite the financial strength of our client. We therefore proposed Suncorp
  • We worked closely with the client’s accountant to understand flow of income, collect the latest financials, BAS Statements and ATO Portals. We also prepared accountants letters explaining any one off income or expenses, and explaining any additional directorships
  • Given the strength of this client, we were aiming for a “one touch” approval, despite the size of the client’s file. We were able to achieve this with the deal being promptly being approved by credit after the first review. No further credit questions were asked which is something extremely rare in Commercial Banking. Our Suncorp Commercial Banker commended us on the quality of the application
  • Our client was able to settle on time and on the most competitive terms possible, and the property was tenanted soon after, procuring a quality investment asset for our client and his family.