Do you need finance for your car yard?
Our brokers can help! We will find the right commercial loan with the right lender.
You may have many questions. Here we address some of the questions you may have.
What can I borrow?
Depending on whether you are purchasing the car yard freehold or leasehold, the LVR that you will be able to borrow will vary:
- where you are borrowing freehold (that is buying the property) you can borrow up to 70% of the yard’s value, however, if you guarantee the loan with another property some lenders will allow you to borrow 100% of the value of the yard.
- Where you are only purchasing the business, you may be able to borrow up to 50% of the business’ value.
- The maximum loan terms most lenders offer is limited to 20 years in some cases.
- Some banks may look at loans over the amount of $5 milion, depending on individual circumstances.
Am I eligible?
In order get this type of loan approved, you will need to have:
- A business plan detailing how you forecast cash flow and any potential competition
- You will need to provide evidence of your qualification to run a car-yard
- At least the last 2 years financials for yourself and your business
- Evidence that you have managerial experience in a dealership
- Your income will need to be at least 1.5 to 2 times more than the potential interest that will be accrued on the loan
- Explanation for any defaults or adverse bureau present on your credit report
We can also do a low doc loan for a yard with a select number of lenders.
How do banks assess my loan?
- Banks will consider where the location of the dealership is going to be.
- Some banks will want to see that where you are just buying freehold that the tenant has signed a lease for at least 5 years. Background on the tenant is important
- Whether you are just offering the car yard as security or whether you are also offering another standard residential or commercial security
- Banks will consider whether the yard you are buying is specialised- potentially making it more difficult to sell if you were to default on your loan.
Feel free to give our friendly brokers a call on 1300 656 600 or send us an enquiry and we will contact you!