Never been a better time for small business
Recently Australia’s banks & mortgage lenders have started becoming more aggressive with their small business and commercial lending campaigns. With our regulators placing tighter restrictions on lending to residential investment, Banks & mortgage lenders are looking to make up their investor lending shortfall in the commercial space. Which is driving increased competition and is great news for small to medium business owners.
This increased competition has led to some amazing new product offerings from lending institutions, with rates now starting from 4.19% they have become more competitive than many home loan products. I caught up with Dale Ware from Ray White Gladstone for his opinion “These new banking products come at a great time for Gladstone investors. With our market being a bit weaker than normal investors are able to secure a low interest rate and conditions never seen before in the commercial space. Getting support like this from the banks will be a great boost for business”
The lender’s aren’t just stopping at interest rates, they are also reducing fees, making their products more flexible and removing restrictions placed on borrowers. The most exciting change is the big push for ‘No Reviews, Ever!’ products. With traditional commercial lending you need to accommodate in Annual or Bi-Annual reviews with your banks business banking agent, which often come with the need for updated valuations being completed on your security properties. Generally these costs are on charged to you, potentially your overall return on investment.
“I have been a commercial property owner for many years, and the forced reviews were always a necessary evil that went along with being so. However with these new products being released it is now going to be much easier for my investments to be truly Set-And-Forget, which allows me to get on with my day to day life” Dale explains.
With the reduction, in some cases abolishment of lending fees it is now far easier to switch your lending if (when) your existing bank won’t play ball. In previous environments application and settlement fees could have been in the tens of thousands of dollars, which gave your existing lender the stability of knowing you weren’t going anywhere, no matter how poor there services were. The recent moves have seen these drop as low as $500 in application fees, giving owner’s the flexibility of exploring their options and coming out of the exercise with quite extreme savings.
With these savings often exceeding $10-$30,000 per year it can have some massive positive effects for your ongoing cash-flow.
By Chris Maguire
Loan Market Gladstone