Commercial deals explained

by Adam Smith13 Jan 2016

The takeaway:
Get the right people involved. In every property transaction involving a transfer of asset, there is a buyer and seller, each with different but ultimately linked objectives. Brokers should therefore keep in mind that they can potentially add value on both sides of a transaction, particularly when an impasse might arise. With commercial lending, the best solution is not just about the quoted interest rate. On both sides of this transaction, the central consideration involved properly managing the cash flow impacts of the loan structures in the immediate, and for the longer, term. On this occasion, both brokers were able to deliver tailored funding arrangements to support their client’s requirements and had confidence from the involvement of a single, capable lender providing a considered solution and effecting a timely settlement.

NAB Commercial Broker
The scenario:

Our client had been in business for over 40 years and had banked with a competitor for most of this time.  Their business had several different family shareholders who were ageing, and new management looking to take advantage of changing market conditions.

Though the business had significant assets, their previous bank placed little value on these, preferring to secure their debts on a traditional basis over residential and commercial property along with a general charge over the business.  The client, through their accountant and broker, felt the bank could offer better terms that included reducing the property security provided and structuring a facility to improve overall business cash flow.

The solution:
Working collaboratively alongside the client’s broker, NAB’s commercial broking banking relationship team, equipment finance specialists and in-house credit team were able to go through the client’s situation step by step. Through this process they were able to better understand the nature of their business, balance sheet and cash flow.

NAB then became comfortable to secure the facility purely against the plant and equipment of the business, releasing property security and the guarantees of the ageing shareholders.  

The takeaway:
The success of this transaction required a solution outside of the traditional property security lend, so it really came about through the broker’s active engagement with NAB early on in the transaction. As a result of this all parties were able to brainstorm together around the multiple options available.  

It then required the trust of the broker to participate in joint meetings with the client and the whole NAB team before approval stage, to ensure any solutions were going to meet the client’s short and long-term needs.  Equally importantly, the client felt throughout the process that they would have an ongoing long-term relationship both with their broker and with NAB.


read more > 1 2 3