Maxed out on borrowing power? | Twelve Grains Capital

Hi! David here. The most frustrating thing for an avid property investor is to be told by your bank that you’ve maxed out on your borrowing power. How come? The cash flow is strong, you’ve got plenty of equity, you need to expand your healthy property portfolio, what are your options?

One loan product that a lot of investors don’t know about is lease-doc. This is a product where lenders will rely ONLY on the lease of the property to be able to grant you a loan. Only caveat is, it needs to be a commercial transaction. Read more below to see how it works!

How do they assess the lease income?

The lender will look at:

✅ The financial strength of your tenant.

✅ The remaining term of the lease (>12 months minimum).

✅ The interest cover ratio.

You can use a commercial lease doc loan on a residential property if your loan in NCCP unregulated:

✅ Loans in the name of a company (i.e. not to a “natural person”); or

✅ Loans used predominantly to invest in commercial property, shares or a business.

Why do people choose a lease doc?

The majority of our lease-doc borrowers fall into one of three categories:

✅ Self-funded retirees.

✅ People with a complex financial situation.

✅ Self-employed borrowers with no income evidence.

The main advantages are that the loan application process is simple and it is easier to get approved. Loan terms can be up to 30 years, LVR up to 75%, and interest rate is around 1.5% higher than market rate.

Let us know how we could help. Speak with us today.
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