Customer: Hospitality venue operator with 4 bars across the Inner West of Sydney.
Funding need: $850,000 loan in their SMSF to purchase a small shop to be converted into a Small bar under NSW licensing rules. Venue is very close to a large live concert venue and would capture patrons that are attending nearby pubs and restaurants prior and after shows.
Issues faced: The clients venues are still ramping up turnover and this new venture is with a new partner that they have not operated with formally before. The new business partner had no substantial cash to contribute to the venue purchase however did have a substantial balance in their Super fund. The main clients financials are much stronger than the new partners.
Solution: After the partners received the appropriate SMSF accounting advice, they established a new SMSF which in turn purchased the venue. We sought out an appropriate funder to assist with a 65% LVR loan with the clients contributing cash from their personal SMSF's for this purchase. The funder we utilised was not concerned with the overall business picture, and concentrated on the strength of the SMSF and the asset they were purchasing. They used best use and market rent for the property being purchased.
Other notes: Our referrer will net over $4,400 in up-front income and share trail with us on this transaction. They referred the deal to us and concentrated upon their residential broking business. The clients continue to use the referring broker for their home loan business, and they aren't at risk of refinancing to a business bank. We logged over 180 calls and emails in the course of this deal over 5 months - time saving win for the referrer.