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Buying an established accommodation business

Posted: Sun Jun 28, 2015 12:20 pm
by petad
I am interested in purchasing an established accommodation business (4 holiday cottages on the property, as well as an owner's residence - 3 bedroom home). The business is a proven income earner and has won various tourism awards. The cottages are forward booked until 2016.
What sort of loan would I apply for, as the property would obviously be used for commercial and private purposes? I have a $150,000 deposit and the property is being sold for 1.5 million.
Would I need a guarantor or anything else to apply for this size loan?
I am new to all of this, so any comments would be appreciated.

Re: Buying an established accommodation business

Posted: Mon Jun 29, 2015 12:10 pm
by Hoa Hong
Hi petad,

With the current security being a short term accommodation security, this would mean that we would need to put this with a commercial lender. When we approach commercial lenders, the maximum lending is usually around the 65% marker.

With what you are looking at doing, we would require a much larger deposit being about $525,000.

If you have a guarantor or other properties yourself, you can use it as security support to obtain more funding. Rate wise we are looking at about a 6-8% rate depending on the lender.