Loan scenario: Are you Santa or the Grinch?

by Ben Abbott09 Dec 2011

The countdown to Christmas makes turnaround speeds critical, so what will you do if your clients need funding to complete the purchase of a commercial strata unit before the Christmas Turkey?

“It’s not unusual for us to have 14 day settlement requests,” said Provident Capital managing director Michael O’Sullivan.

He said speed to settlement was a focus during the Christmas rush, and came to the fore in a recent deal achieved for clients of Provident Platinum, the group's low-doc range.

“Our borrowers required funding to complete the purchase of a commercial strata unit in under two weeks,” he said. “Rejected by traditional lenders due to the nature of the security and their ‘low-doc’ status, the borrowers were under considerable pressure to settle.”

The loan application was for $240,000 to complete the purchase of a commercial strata unit in South Yarra, Victoria, for $500,000.

O’Sullivan said by the time their broker approached Provident Capital a notice to complete had been issued with the vendor firm that no further extensions would be granted.

"Stranded, and about to lose their deposit (and possibly sued) our borrowers could see no positive outcome,” he said.

However, O'Sullivan said the group had a firm commitment to settlement, and was prepared to find the necessary solution to get the deal done.

O'Sullivan said the borrower paid valuation and legal fees upfront in anticipation of a positive valuation, and provided all information required to assess the transaction.

In addition, the borrowers' solicitor was engaged to undertake all necessary searches and expedite execution when loan documentation was received.

“With the cooperation of all parties settlement was achieved before the expiry of the notice to complete. Both the borrower and the broker were, to say the least, ‘relieved’,” he said.

O'Sullivan said Provident Capital was especially determined in the period before Christmas to uphold its pledge of supporting its brokers with "superior service".

Australian Broker would like to invite all lenders to submit loan and client scenarios they think are unique, important  - or just plain confusing - to help brokers meet their client needs.

Contact the editor at to submit or discuss your loan scenario.

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