Loan types

Basic Variable Basic Variable Rate loans are often referred to as ’no frills’ loans and tend to offer a lower interest rate but with less features than other loans.

 

Standard Variable

Standard Variable Rate loans are based on the official Reserve Bank rate and, as the name suggests, will vary with time depending on the market. This type of loan is traditionally the most flexible and may include optional features such as the ability to make extra repayments, to redraw funds or to split your loan, just to name a few.

 

Fixed Rate Loans

Fixed Rate Loans are based on a set term and set interest rate. This gives the borrower the certainty of set loan repayments over an agreed period of time but generally does not allow additional payment amounts should official interest rates fall. These loans can however sometimes be combined with variable rate products.

 

Combination or Split Loans

This type of loan allows you to split your loan into two or more components - one component being Fixed, and the other component being Variable or maybe one component being Principal and Interest and the other being Interest Only.

 

Line of Credit

A line of credit, sometimes referred to as revolving credit, essentially allows you to draw the loan balance up to a set limit at any time. Repayments can be flexible, however the loan balance including interest charged must not exceed the set limit.

 

Non-Conforming Loans

Non-conforming loans are designed for borrowers that do not meet tradional bank criteria and may include seasonal or contract workers, non-residents, small or no deposit holders or even those with a poor credit history.

 

Low Documentation Loans

These loans are designed mainly for self-employed or small company borrowers ( although some Lenders will do PAY-G ) who are unable to provide the required documentation to support a traditional loan application.

 

Mezzanine Funding

Mezzanine funding can be for both construction and property investment loans and are tailored to the requirement of the project. It is typically used in situations where the borrower has insufficient equity to fund the project, or requires additional funding to complete a project. Mezzanine funding is utilized in situations where the client requires additional funding beyond the means of traditional facilities.

 

Equity Finance (Joint Venture Finance) 

Equity finance is typically a joint venture where up to 100% of project costs are covered of land subdivisions and development projects. Equity finance is typically secured by a second mortgage or by taking a direct equity position in the project. 

 

Chattel Mortgage

A mortgage loan using personal property such as automobiles, paintings, inventories, or real estate leases, but not real estate ownership, as security. Gives the Borrower immediate ownership of the goods, meaning they can claim full depreciation from day one. The interest is a tax deductible expense. The Lender takes a charge over the goods as security. This product does not attract GST.

 

Lease

An agreement that permits one party (the lessee) to use property owned by another party (the lessor). The lease, which may be written either for a short term or for a long term, often results in tax benefits to both parties. Borrower does not own the goods, however the full lease payment ex GST becomes a tax deduction. The borrower can have a "Residual" built into the Lease to reduce the Capital repayments over the term of the Lease.

 

Novated Lease

The same as a standard Lease, except that there are normally three parties to the lease (including the Borrower). Example: Company wants to lease a vehicle for an employee, but does not want to be stuck with the vehicle if the employee were to leave. In general terms with a Novated lease, the employee as well as the company would be assessed for the facility and in the event that the employee left, the lease agreement would be transferred to them. No unwanted or surplus vehicles - If an employee leaves (for whatever reason) or when the lease expires, the vehicle also departs, once again becoming the sole responsibility of the employee. Which means employers aren’t saddled with reallocating or disposing of excess vehicles and they do they incur either early termination penalties on finance or losses on unplanned sales of vehicles.

 

Commercial Hire Purchase or Asset Purchase

Client owns the goods in full at the end of the term. The Borrower can choose between 100% finance or contributing by way of deposit to reduce the risk to the lender. GST does not apply to this product

 

Rental

Client never owns the goods. Full rental payment (ex GST) is tax deductible. There is no residual payment so goods can be returned to the lender at the end of the rental period.