How a First Mortgage Won a Commercial Purchase on a 21-Day Settlement

For commercial and industrial purchases, timing often decides the deal. Here is a worked example of how we funded a warehouse purchase quickly enough to hold the contract.

This is an illustrative example. Figures are indicative and do not represent an actual client.

The situation

A trust was buying an industrial warehouse for $5,000,000 on a 21-day settlement. The banks were interested but could not clear credit inside 21 days. The buyer could not risk the contract on a six to eight week process.

The deal at a glance

• Borrower: trust, investment purpose
• Security: industrial warehouse, purchase price and value $5,000,000
• Loan: $3,000,000 first mortgage, at 60% of the property value
• Term: 12 months
• Exit: refinance to a bank term facility once the tenancy and financials are seasoned

How we made it work

We funded 60% of the $5,000,000 price, a $3,000,000 first mortgage, and assessed the deal on the property and the exit rather than a rigid servicing template. That let us give a firm answer early and hold the settlement date. The borrower brought the balance. On top of the $2,000,000 equity in the purchase, they covered $275,000 of stamp duty at 5.5% and $15,000 of legals, for about $2,290,000 of their own funds into the deal. A conservative 60% starting position also gave everyone comfort on the exit.

The outcome

We settled in around ten business days against a 21-day contract, roughly a third of the time the banks needed. The client secured the asset and now has twelve months to stabilise the tenancy before moving to longer-term bank funding.

Broker takeaway

For commercial and industrial purchases where timing is everything, a private first mortgage is often the difference between winning and losing the deal. We are comfortable across larger facilities and multi-security positions, and we give a straight answer quickly.

Talk to Vía Private

Vía Private provides commercial and industrial property loans to companies and trusts across NSW, VIC, QLD and the ACT. Brokers welcome.

Illustrative example only. Vía Private is an Australian non-bank private credit lender providing property-secured commercial loans to companies and trusts for business and investment purposes. All lending is subject to credit approval and valuation. General information only, not financial or credit advice.