$1.2m Business Loan Providing Time to Refinance and Execute a Planned Property Sale

The client had previously secured short-term funding against a residential property, with the expectation that upcoming consultancy payments would repay the facility. However, delays in project-related payments created an unexpected funding gap, requiring a refinance solution. 

Complicating matters further:

• An existing non-bank lender required repayment. 
• The client was managing arrears with a major bank lender. 
• Timing delays on renewable energy projects had impacted expected cash inflows.
• Traditional cash flow servicing metrics were not the primary strength of the deal. 

The key requirement was a structured solution that would provide sufficient time for a planned property sale while reducing funding pressure and preserving equity.

Fifo Capital structured a $1.2 million business loan to refinance the existing private lender and reduce arrears with the client's primary bank.

The facility was secured by a second-ranking mortgage over a premium residential property in Melbourne's inner east, supported by director guarantees and a first-ranking All PAAP over the borrowing entity.

From a broker perspective, several factors underpinned the transaction:

• A recently completed valuation supporting a property value between $4.0 million and $4.25 million.
• A clear exit strategy via sale of the security property. 
• An initial LVR of approximately 75%, increasing to approximately 85% including capitalised interest and fees over the loan term.
• Significant remaining equity within the security property. 
• Interest capitalised for the term, reducing immediate cash flow pressure on the borrower.

Importantly, the structure focused on asset quality, equity position, and a defined exit pathway, rather than relying solely on immediate cash flow servicing.

With the funding in place, the client was able to refinance an expensive existing facility, address short-term funding pressures, and focus on executing a planned asset sale.

The facility provided:

• Immediate repayment of the existing private lender. 
• Additional support to reduce banking arrears.
• Time to realise value from the security property through an orderly sale process. 
• Reduced pressure on working capital while project payments continued to progress.

This transaction demonstrates how a well-structured property-backed solution can provide brokers with an alternative when timing issues and lender policy constraints create obstacles for otherwise viable borrowers.