Property Finance

Loans are an essential part of most family businesses.

Loans are way more than borrowing a set amount and repaying it with interest.

The core considerations in a loan transaction are:

  • Who is the actual borrower? Is it an individual, a partnership, a company or a trust or a combination of these?
  • Is the actual borrower the most appropriate taking into account any tax and risk issues?
  • Is the loan amount a fixed sum or is it a line of credit?
  • Are the repayments fixed or can extra/early repayments be made without penalty?
  • What is the interest rate and can it change?
  • What happens if the borrower doesn’t make repayments on time or cannot make repayments at all? What rights does the lender have?
  • What security is the lender taking and is it adequate?
  • Who are the security providers? Is anyone other than the borrower (i.e. a third party) providing security?
  • If there is more than 1 lender, what is the agreement between them if they have to enforce their security (priorities)?
  • Is the security already charged to another party and how to manage that situation.
  • Does the lender require any guarantees?
  • Are there any special (non standard) conditions that apply to the loan and if they do, what are they?
  • Are the securities over assets located in different states and territories?

If you are borrowing money from a bank or other institutional lender we can assist you with:

  • Reviewing the lender’s loan agreement and advising you of all the important terms including any non standard terms
  • Reviewing the security documents that the lender has asked you to sign
  • Negotiating the terms of any loan agreement or security documents
  • Satisfying the lender’s requirements including providing certificates of legal advice and varying trust deeds to include powers that the lender requires.
  • Managing any unwanted Divisions 7A issues that can arise from corporate guarantees

If you are a lender, we can assist you with:

  • Preparing the loan agreement so that it includes all the necessary terms and conditions
  • Preparing the security documents (for example mortgages, general security deeds over all assets or specific assets of the borrower or a third party security provider and third party and director’s guarantees)
  • Investigating land and water title and personal property securities registers and advising of any already existing registered interests which would rank ahead of later interests
  • Attending to stamping and registration of security documents at the relevant land titles offices or on the Personal Property Securities Register
  • Advising you about Personal Property Securities Act issues that apply to the loan and security that you want to put in place
  • If during the life of the loan the borrower’s circumstances change, varying the loan agreement to allow for more money to be advanced, additional or replacement security to be taken or a variation to the repayment terms
  • Once the loan is repaid, preparing and registering all the necessary release documents