Our client is the owner of multiple Anytime Fitness franchises in NSW. His top performing gym was ranked among the top 20 across the Anytime Fitness network in the country. An opportunity arose for our client to purchase the warehouse premises of this gym at $2.3M.
This scenario again showcases the depth of our technical capability and the high level of service provided to our private clients who are motivated business owners.
First things first, we assessed ALL of our client’s entities and their financials to determine which were profitable. We then identified the “core” businesses, and when viewing these together, trading performance was evidently robust.
With access to the equity held in the client’s two residential properties (home and investment), he was able to achieve a 65% LVR via cross-collateralisation.
Because our client was a qualified chartered accountant, owning 2 accounting businesses, he could borrow at 90% LVR against his residential properties, offering a further $350K in funding.
Our client’s professional status as an accountant also allowed him to access unsecured lending with a different lender to address the valuation shortfall.
Applying a business funding method known as “credit stacking”, where loans, including the unsecured lending, of differing terms and interest rates are taken out, we were able to get the deal across the line.
Our client was willing to take out higher rates on a portion of lending, where the overall WACC was acceptable.
As a form of security over the assets of the main business, our client entered into a General Security Agreement (GSA) with the bank. Settlement took place as planned and our client was a proud owner of both a top performing gym and premises in which it operates.