1 00:00:00,270 --> 00:00:04,960 [Music]2 00:00:06,040 --> 00:00:08,000 but what plays a big part is you know3 00:00:08,000 --> 00:00:10,519 the four sees of credit yeah what4 00:00:10,519 --> 00:00:12,000 character do you have have you been in5 00:00:12,000 --> 00:00:14,639 the industry it's I've had one when I6 00:00:14,639 --> 00:00:16,400 was a broker before where someone come7 00:00:16,400 --> 00:00:18,480 oh I'd like to buy a clothing business8 00:00:18,480 --> 00:00:20,279 oh well have you worked in the industry9 00:00:20,279 --> 00:00:21,600 oh no I just love10 00:00:21,600 --> 00:00:24,599 clothes it's like okay well you know do11 00:00:24,599 --> 00:00:26,439 you understand work cover do you12 00:00:26,439 --> 00:00:29,240 understand super wages rostering so13 00:00:29,240 --> 00:00:30,359 there's a lot of things that go into14 00:00:30,359 --> 00:00:32,320 running a business so if you're starting15 00:00:32,320 --> 00:00:34,280 up a new business A business plan is16 00:00:34,280 --> 00:00:35,640 going to show us what industry17 00:00:35,640 --> 00:00:37,960 experience you've had um do you know18 00:00:37,960 --> 00:00:39,800 have you worked in there as well do you19 00:00:39,800 --> 00:00:40,640 understand the business you're looking20 00:00:40,640 --> 00:00:42,840 at buying or how a runner and then a21 00:00:42,840 --> 00:00:45,200 cash forecast yes we can put numbers on22 00:00:45,200 --> 00:00:46,800 a page and I think it's rare that I see23 00:00:46,800 --> 00:00:48,640 a cash forecast that doesn't service the24 00:00:48,640 --> 00:00:50,879 debt um but what happens is how did you25 00:00:50,879 --> 00:00:52,840 come up with those numbers welcome to26 00:00:52,840 --> 00:00:54,879 the debt to Financial Freedom podcast27 00:00:54,879 --> 00:00:56,680 I'm your host Victor Lagos and the28 00:00:56,680 --> 00:00:59,120 founder of Lagos Financial I've been in29 00:00:59,120 --> 00:01:01,320 the finance and lending industry for 1630 00:01:01,320 --> 00:01:03,480 years and I've personally made Financial31 00:01:03,480 --> 00:01:06,119 mistakes and learned from them I started32 00:01:06,119 --> 00:01:07,960 this podcast to share stories and33 00:01:07,960 --> 00:01:10,280 lessons on my own journey and to share34 00:01:10,280 --> 00:01:12,360 insights that may help others on their35 00:01:12,360 --> 00:01:14,799 journey and I interview people that I've36 00:01:14,799 --> 00:01:16,680 connected with that share the same37 00:01:16,680 --> 00:01:18,759 values and Mission to help others create38 00:01:18,759 --> 00:01:21,159 Financial Freedom my goal with this39 00:01:21,159 --> 00:01:24,119 podcast is to share raw honest40 00:01:24,119 --> 00:01:26,280 transparent and helpful stories that you41 00:01:26,280 --> 00:01:28,759 can relate to and inspires you to take42 00:01:28,759 --> 00:01:30,400 control of your finances43 00:01:30,400 --> 00:01:32,200 and only have debt that brings you44 00:01:32,200 --> 00:01:35,200 closer to Financial45 00:01:35,240 --> 00:01:37,880 Freedom welcome to the debt to Financial46 00:01:37,880 --> 00:01:40,759 Freedom podcast I am your host Victor47 00:01:40,759 --> 00:01:44,119 Lagos I am also the founder of the48 00:01:44,119 --> 00:01:46,119 commercial and residential Finance49 00:01:46,119 --> 00:01:48,159 brokerage called Lagos50 00:01:48,159 --> 00:01:52,040 Financial so today I've got a uh51 00:01:52,040 --> 00:01:55,680 interesting guest someone who's uh been52 00:01:55,680 --> 00:01:58,840 in the commercial lending industry for53 00:01:58,840 --> 00:02:01,280 about 25 years now yes how quickly it54 00:02:01,280 --> 00:02:03,360 goes past the fact that when you said oh55 00:02:03,360 --> 00:02:05,600 you started in 1998 that yeah the56 00:02:05,600 --> 00:02:07,560 numbers roll on pretty quick but when57 00:02:07,560 --> 00:02:09,959 you love what you do time just58 00:02:09,959 --> 00:02:12,280 flies yeah I mean I was looking at your59 00:02:12,280 --> 00:02:13,840 LinkedIn profile and it said that you're60 00:02:13,840 --> 00:02:17,959 working uh in ing in61 00:02:17,959 --> 00:02:20,080 1998 yes it was a long time ago it's62 00:02:20,080 --> 00:02:21,720 when they first started introducing63 00:02:21,720 --> 00:02:23,959 loans from Brokers yeah we had to64 00:02:23,959 --> 00:02:25,920 manually check each one to make sure of65 00:02:25,920 --> 00:02:28,000 the quality of them coming in and then66 00:02:28,000 --> 00:02:30,040 from there it just snowballed yeah67 00:02:30,040 --> 00:02:32,560 because back then it commercial broking68 00:02:32,560 --> 00:02:34,000 wasn't really a thing right it was just69 00:02:34,000 --> 00:02:35,680 mainly residential or were you doing70 00:02:35,680 --> 00:02:37,519 commercial stuff back then as well uh71 00:02:37,519 --> 00:02:38,640 well that was when they first started72 00:02:38,640 --> 00:02:41,000 across the residential space um in73 00:02:41,000 --> 00:02:42,360 hadn't actually pushed into commercial74 00:02:42,360 --> 00:02:43,879 yet so I was just working in purely75 00:02:43,879 --> 00:02:46,879 residential then okay and you started uh76 00:02:46,879 --> 00:02:51,280 at A&Z in what 2005 or something like77 00:02:51,280 --> 00:02:53,159 that or not long after that where I just78 00:02:53,159 --> 00:02:55,519 went straight into commercial yeah so79 00:02:55,519 --> 00:02:57,959 yeah well look this is why I've got you80 00:02:57,959 --> 00:02:59,760 on the show today because a lot of my81 00:02:59,760 --> 00:03:02,440 listeners are a firsttime uh commercial82 00:03:02,440 --> 00:03:05,000 investors they've got a residential83 00:03:05,000 --> 00:03:07,319 portfolio or they don't have a84 00:03:07,319 --> 00:03:08,879 residential portfolio and they just they85 00:03:08,879 --> 00:03:11,120 realize commercial is a good asset86 00:03:11,120 --> 00:03:13,440 because it's um you know it's all about87 00:03:13,440 --> 00:03:15,239 passive income you know Financial88 00:03:15,239 --> 00:03:17,000 Freedom is creating multiple streams of89 00:03:17,000 --> 00:03:20,239 income and commercial property seems90 00:03:20,239 --> 00:03:22,599 like the clear winner but the The91 00:03:22,599 --> 00:03:25,400 Lending industry sorry Landing landscape92 00:03:25,400 --> 00:03:27,680 is very different to residential so I93 00:03:27,680 --> 00:03:29,840 wanted to ask you some questions from94 00:03:29,840 --> 00:03:31,519 your angle from your perspective I guess95 00:03:31,519 --> 00:03:34,120 I'm representing the bank because a lot96 00:03:34,120 --> 00:03:35,680 of people don't you know when they want97 00:03:35,680 --> 00:03:37,760 to research and how does commercial98 00:03:37,760 --> 00:03:39,360 lending work what are the interest rates99 00:03:39,360 --> 00:03:42,159 what are the fees um you can't find that100 00:03:42,159 --> 00:03:44,280 stuff it's not readily available online101 00:03:44,280 --> 00:03:46,760 why is it well residential generally is102 00:03:46,760 --> 00:03:48,400 a little bit more policy based you're103 00:03:48,400 --> 00:03:50,519 find like you earn income you've got104 00:03:50,519 --> 00:03:52,920 security and kind of get yes or no when105 00:03:52,920 --> 00:03:55,120 you start moving across to commercial it106 00:03:55,120 --> 00:03:57,040 becomes very much judgmental so107 00:03:57,040 --> 00:03:58,599 depending on the type of security you're108 00:03:58,599 --> 00:04:00,560 buying the tenant you might have in109 00:04:00,560 --> 00:04:02,519 there maybe you're going to be occupying110 00:04:02,519 --> 00:04:04,040 it yourself so there's a lot of111 00:04:04,040 --> 00:04:06,799 different VAR variables that go into it112 00:04:06,799 --> 00:04:08,680 and where it becomes judgmental in the113 00:04:08,680 --> 00:04:10,879 background um so then obviously the114 00:04:10,879 --> 00:04:13,079 policies s of different differentiates115 00:04:13,079 --> 00:04:14,920 where you go retail policy and then116 00:04:14,920 --> 00:04:16,440 you've got wholesale so it's a two117 00:04:16,440 --> 00:04:17,839 different credit policies and one118 00:04:17,839 --> 00:04:20,358 obviously comes under nccp so National119 00:04:20,358 --> 00:04:22,440 Consumer Credit code for the residential120 00:04:22,440 --> 00:04:24,120 and when you go into wholesale so the121 00:04:24,120 --> 00:04:25,840 commercial side then yeah it's122 00:04:25,840 --> 00:04:27,560 judgmental it doesn't it's not so strict123 00:04:27,560 --> 00:04:29,440 in the background yeah that makes a lot124 00:04:29,440 --> 00:04:31,960 of sense and that's where I've really125 00:04:31,960 --> 00:04:34,600 come in into the industry the commercial126 00:04:34,600 --> 00:04:36,440 side the last couple of years and my127 00:04:36,440 --> 00:04:39,080 first commercial deal was actually with128 00:04:39,080 --> 00:04:41,960 Az um so that was two and a bit years129 00:04:41,960 --> 00:04:45,759 ago um the client is still on a fixed130 00:04:45,759 --> 00:04:47,800 rate for another 12 months I got him a131 00:04:47,800 --> 00:04:51,280 3year fixed rate interest only132 00:04:51,280 --> 00:04:54,759 2.49% yeah and loan term is 30 years and133 00:04:54,759 --> 00:04:57,120 that's very uncommon in the commercial134 00:04:57,120 --> 00:05:00,199 lending uh space what I found with other135 00:05:00,199 --> 00:05:03,000 Banks especially the big four they136 00:05:03,000 --> 00:05:05,280 typically offer a short-term you know137 00:05:05,280 --> 00:05:07,840 loan such as you know 2 years or 3 years138 00:05:07,840 --> 00:05:10,120 Max and then after that they roll the139 00:05:10,120 --> 00:05:11,840 loan over there might be an annual140 00:05:11,840 --> 00:05:14,400 review in between uh another valuation141 00:05:14,400 --> 00:05:16,240 after say 3 years and the customer has142 00:05:16,240 --> 00:05:18,479 to pay for that and then they you know143 00:05:18,479 --> 00:05:20,360 give them another 3 years but obviously144 00:05:20,360 --> 00:05:21,800 you can't expect someone to pay the loan145 00:05:21,800 --> 00:05:23,759 back in 3 years so it's usually interest146 00:05:23,759 --> 00:05:26,800 only what sets AZ apart because it seems147 00:05:26,800 --> 00:05:28,360 like you know you guys are doing 30148 00:05:28,360 --> 00:05:30,160 years you know is that was that149 00:05:30,160 --> 00:05:31,840 deliberate is that something you know150 00:05:31,840 --> 00:05:33,400 I'll take a quick step only your first151 00:05:33,400 --> 00:05:34,880 commercial Loan 2 years ago so you're152 00:05:34,880 --> 00:05:37,880 still you know getting into it so 20 25153 00:05:37,880 --> 00:05:41,280 years in um you'll find obviously yeah154 00:05:41,280 --> 00:05:43,319 you can vary depending on CU there is155 00:05:43,319 --> 00:05:45,600 options with from the homelan side of it156 00:05:45,600 --> 00:05:47,080 generally you're buying a property you157 00:05:47,080 --> 00:05:48,639 pay it off if it's investment you might158 00:05:48,639 --> 00:05:50,479 do interest only when you start going159 00:05:50,479 --> 00:05:52,800 commercial there's different types of160 00:05:52,800 --> 00:05:55,080 products and variables that go into it161 00:05:55,080 --> 00:05:56,680 see you might be looking at just a162 00:05:56,680 --> 00:05:58,680 standard 30-year loan term obviously163 00:05:58,680 --> 00:06:00,080 about a year ago lot of the industry164 00:06:00,080 --> 00:06:01,720 moved to a 30-year loan term in the165 00:06:01,720 --> 00:06:04,240 small business space um then obviously166 00:06:04,240 --> 00:06:05,919 it's a more of a set and forget for your167 00:06:05,919 --> 00:06:07,759 investment side of it but if you've168 00:06:07,759 --> 00:06:09,280 actually just got it as a lease so169 00:06:09,280 --> 00:06:12,240 rented what we do is another policy is170 00:06:12,240 --> 00:06:14,199 just using the rent and that's how we171 00:06:14,199 --> 00:06:15,960 determine how much you can borrow and if172 00:06:15,960 --> 00:06:17,599 we're just using the rent if you're on a173 00:06:17,599 --> 00:06:20,080 5year lease then your term will be 5174 00:06:20,080 --> 00:06:22,639 years and after that 5 years we look to175 00:06:22,639 --> 00:06:24,960 see has that tenant taken on the next176 00:06:24,960 --> 00:06:26,840 round of lease so another 5 years after177 00:06:26,840 --> 00:06:28,919 that and then we do another 5year term178 00:06:28,919 --> 00:06:30,599 off the back of that cuz if that's the179 00:06:30,599 --> 00:06:32,680 only income we're using to assess a180 00:06:32,680 --> 00:06:34,919 commercial loan then what happens if181 00:06:34,919 --> 00:06:37,280 that tenant kind of leaves so it's just182 00:06:37,280 --> 00:06:38,720 kind of making sure that say if we're183 00:06:38,720 --> 00:06:41,199 using extra income from your trading184 00:06:41,199 --> 00:06:44,720 business or your ongoing job then maybe185 00:06:44,720 --> 00:06:46,680 we can look at a 30 year term instead so186 00:06:46,680 --> 00:06:48,120 that is more of a set and forget because187 00:06:48,120 --> 00:06:49,919 they're not just relying on the rental188 00:06:49,919 --> 00:06:52,319 income that that property's getting yeah189 00:06:52,319 --> 00:06:54,080 yeah that makes sense and Le stock has190 00:06:54,080 --> 00:06:56,680 been around for quite some time this is191 00:06:56,680 --> 00:06:58,840 a product that I've been using quite a192 00:06:58,840 --> 00:07:01,000 lot and um it's it's quite a good193 00:07:01,000 --> 00:07:02,599 product for people that have reached194 00:07:02,599 --> 00:07:04,720 their borrowing capacity limits for195 00:07:04,720 --> 00:07:07,680 their residential portfolio because the196 00:07:07,680 --> 00:07:10,360 rental return is so much stronger the197 00:07:10,360 --> 00:07:12,680 bank um there's a few Banks out there198 00:07:12,680 --> 00:07:15,800 now a andz can do a loan according to199 00:07:15,800 --> 00:07:18,479 the lease only so even though you're the200 00:07:18,479 --> 00:07:20,080 say the borrower the201 00:07:20,080 --> 00:07:24,000 guarantor um you're not necessarily202 00:07:24,000 --> 00:07:26,080 needing your income to service the debt203 00:07:26,080 --> 00:07:28,080 but your profile is still important you204 00:07:28,080 --> 00:07:29,879 still need to be someone that has got205 00:07:29,879 --> 00:07:31,759 you know decent amount of assets to your206 00:07:31,759 --> 00:07:33,759 name you know you don't have any you207 00:07:33,759 --> 00:07:35,440 know credit impairments on your file and208 00:07:35,440 --> 00:07:37,919 things like that but it is relatively209 00:07:37,919 --> 00:07:39,639 low touch when it comes to the210 00:07:39,639 --> 00:07:41,400 individuals behind it it's really on the211 00:07:41,400 --> 00:07:43,599 tenant and the lease and the and the212 00:07:43,599 --> 00:07:45,639 property itself right this is where your213 00:07:45,639 --> 00:07:47,680 experience comes into it and this is214 00:07:47,680 --> 00:07:49,680 where the mortgage broken industry gives215 00:07:49,680 --> 00:07:52,319 advice because you probably as you've216 00:07:52,319 --> 00:07:53,800 seen a lot of the banks don't put217 00:07:53,800 --> 00:07:55,599 policies and stuff online because it is218 00:07:55,599 --> 00:07:57,639 all judgmental credit on the commercial219 00:07:57,639 --> 00:07:59,639 side and this is where the advice you220 00:07:59,639 --> 00:08:02,080 give around what banks can do what um221 00:08:02,080 --> 00:08:03,840 you can start deciding is it more of the222 00:08:03,840 --> 00:08:05,039 lease stock were you just using the223 00:08:05,039 --> 00:08:07,159 rental income or are we using other224 00:08:07,159 --> 00:08:09,639 income for a longer loan term because225 00:08:09,639 --> 00:08:11,720 it's it be harder for you know a client226 00:08:11,720 --> 00:08:12,960 out there to do their own research for227 00:08:12,960 --> 00:08:15,919 it yeah y one thing you touched on228 00:08:15,919 --> 00:08:18,560 earlier and I was going to ask you about229 00:08:18,560 --> 00:08:19,240 uh230 00:08:19,240 --> 00:08:22,840 nccp and or coded lending and then231 00:08:22,840 --> 00:08:26,800 non-coded or unregulated lending so the232 00:08:26,800 --> 00:08:28,960 birth of nccp National Consumer Credit233 00:08:28,960 --> 00:08:32,000 protection was after the GFC Global234 00:08:32,000 --> 00:08:35,120 financial crisis and to my knowledge cuz235 00:08:35,120 --> 00:08:38,279 I I got in the industry in 2006 um so236 00:08:38,279 --> 00:08:40,760 it's right at that time um to my237 00:08:40,760 --> 00:08:43,080 knowledge it was a lot to do with uh238 00:08:43,080 --> 00:08:45,519 borrowers basically going to the courts239 00:08:45,519 --> 00:08:46,680 and saying the bank shouldn't have lent240 00:08:46,680 --> 00:08:50,000 me the money um and they won so then241 00:08:50,000 --> 00:08:52,279 they introduced these um regulations to242 00:08:52,279 --> 00:08:54,760 protect the consumer so what happened243 00:08:54,760 --> 00:08:57,600 then there was a split right between244 00:08:57,600 --> 00:08:59,760 consumer retail245 00:08:59,760 --> 00:09:02,399 um customers which includes residential246 00:09:02,399 --> 00:09:04,839 lending for own occupied or investment247 00:09:04,839 --> 00:09:07,480 purposes as well as personal loans car248 00:09:07,480 --> 00:09:09,160 loans credit cards all of that falls249 00:09:09,160 --> 00:09:11,839 under consumer if it's an individual250 00:09:11,839 --> 00:09:13,440 most of the time they have personal use251 00:09:13,440 --> 00:09:15,839 behind it and then and then unregulated252 00:09:15,839 --> 00:09:18,240 or non-coded lending is when it's a253 00:09:18,240 --> 00:09:20,959 business mhm right um but it doesn't254 00:09:20,959 --> 00:09:23,600 necessarily mean that it has to be a255 00:09:23,600 --> 00:09:27,079 business that's um operating it can be a256 00:09:27,079 --> 00:09:30,320 special purpose vehicle be that be it257 00:09:30,320 --> 00:09:33,480 like a a company or a trust that owns258 00:09:33,480 --> 00:09:37,600 and holds the asset but the individuals259 00:09:37,600 --> 00:09:39,079 don't have a business they don't have a260 00:09:39,079 --> 00:09:40,880 trading business generate you know any261 00:09:40,880 --> 00:09:42,640 income from a self-employed entity it's262 00:09:42,640 --> 00:09:43,600 just263 00:09:43,600 --> 00:09:46,360 py but that still puts it into the264 00:09:46,360 --> 00:09:50,200 non-coded or the non-regulated so from265 00:09:50,200 --> 00:09:51,360 the bank's266 00:09:51,360 --> 00:09:54,920 perspective how do they treat customers267 00:09:54,920 --> 00:09:58,000 differently because of this split h no268 00:09:58,000 --> 00:09:59,880 it's a good question and we do we do269 00:09:59,880 --> 00:10:01,519 treat them differently because when270 00:10:01,519 --> 00:10:03,560 you're coming under the consumer credit271 00:10:03,560 --> 00:10:05,000 code just buying a home loan or272 00:10:05,000 --> 00:10:06,880 investment it is generally just a set273 00:10:06,880 --> 00:10:09,320 and forget there's not much maintenance274 00:10:09,320 --> 00:10:11,560 required um there's just the call center275 00:10:11,560 --> 00:10:12,959 teams if you need to change direct276 00:10:12,959 --> 00:10:14,640 debits so the ongoing requirements they277 00:10:14,640 --> 00:10:16,640 generally a lot less but when you start278 00:10:16,640 --> 00:10:18,399 going into the commercial space279 00:10:18,399 --> 00:10:20,320 generally um a little bit more touch280 00:10:20,320 --> 00:10:22,720 points come across cuz there might be a281 00:10:22,720 --> 00:10:24,279 trading business in the background that282 00:10:24,279 --> 00:10:26,800 might need fos machines trading accounts283 00:10:26,800 --> 00:10:29,120 in the background as well or say if you284 00:10:29,120 --> 00:10:30,720 are just a property investor and you've285 00:10:30,720 --> 00:10:33,120 got that 5year term what happens at the286 00:10:33,120 --> 00:10:35,279 end of the 5 years so what we do is when287 00:10:35,279 --> 00:10:37,079 we settle a commercial loan and most288 00:10:37,079 --> 00:10:39,839 banks have this as well um there is a a289 00:10:39,839 --> 00:10:41,680 banker that's allocated that looks after290 00:10:41,680 --> 00:10:43,680 it so that if something happens in the291 00:10:43,680 --> 00:10:45,880 background or the 5year term comes up or292 00:10:45,880 --> 00:10:47,920 you want to do a variation it requires a293 00:10:47,920 --> 00:10:49,720 little bit more work that's involved294 00:10:49,720 --> 00:10:52,000 with this a straight residential loan so295 00:10:52,000 --> 00:10:53,360 all commercial Banks generally will have296 00:10:53,360 --> 00:10:55,120 a banker or someone allocated to help297 00:10:55,120 --> 00:10:57,200 out or to manage that client going298 00:10:57,200 --> 00:10:59,440 forward so ongoing require ments are299 00:10:59,440 --> 00:11:00,720 there to support it normally there's300 00:11:00,720 --> 00:11:02,240 more maintenance and stuff required with301 00:11:02,240 --> 00:11:05,560 commercial yeah y that makes sense302 00:11:05,560 --> 00:11:07,800 so you know you touched on the fact that303 00:11:07,800 --> 00:11:09,639 there's always a banker involved and I304 00:11:09,639 --> 00:11:12,079 wanted to ask you that question because305 00:11:12,079 --> 00:11:14,279 a lot of um borrowers out there don't306 00:11:14,279 --> 00:11:16,160 realize that there's a a business Banker307 00:11:16,160 --> 00:11:18,040 involved so it's another layer to get to308 00:11:18,040 --> 00:11:20,320 to credit and I always explain this to309 00:11:20,320 --> 00:11:22,200 to my potential customers or existing310 00:11:22,200 --> 00:11:24,000 customers that when you go for311 00:11:24,000 --> 00:11:26,519 residential lending it's basically me as312 00:11:26,519 --> 00:11:30,079 a broker straight to credit it goes into313 00:11:30,079 --> 00:11:33,040 a basically a a machine and then someone314 00:11:33,040 --> 00:11:35,079 at credit you know pre-edit might check315 00:11:35,079 --> 00:11:36,800 the documents and then someone in credit316 00:11:36,800 --> 00:11:38,639 will approve it or assess it to for an317 00:11:38,639 --> 00:11:41,279 approval whereas with with commercial318 00:11:41,279 --> 00:11:45,560 lending it's me as a broker to a banker319 00:11:45,560 --> 00:11:47,000 sometimes to you as a relationship320 00:11:47,000 --> 00:11:48,800 manager who then allocates the banker321 00:11:48,800 --> 00:11:50,000 depending on the322 00:11:50,000 --> 00:11:53,320 location and then what happens is the323 00:11:53,320 --> 00:11:55,760 banker reviews it sometimes that Banker324 00:11:55,760 --> 00:11:58,079 even has a credit coach uh or a state325 00:11:58,079 --> 00:12:00,920 manager that they sort of refer uh the326 00:12:00,920 --> 00:12:02,720 deals to and help them structure it and327 00:12:02,720 --> 00:12:03,920 make sure that you know there's an328 00:12:03,920 --> 00:12:06,000 appetite for credit and that you know329 00:12:06,000 --> 00:12:07,639 they answer all the questions and then330 00:12:07,639 --> 00:12:10,240 they present the deal to credit so that331 00:12:10,240 --> 00:12:12,480 that's why it can can take longer and332 00:12:12,480 --> 00:12:14,800 it's more complexity right333 00:12:14,800 --> 00:12:18,279 so I wanted to ask I guess why you think334 00:12:18,279 --> 00:12:19,279 that is and do you think that will335 00:12:19,279 --> 00:12:22,040 continue for the future um or do you336 00:12:22,040 --> 00:12:23,360 think eventually it will become more337 00:12:23,360 --> 00:12:24,920 streamlined and you'll be able to sort338 00:12:24,920 --> 00:12:26,760 of go straight to credit and you know339 00:12:26,760 --> 00:12:28,639 potentially cut out the bankers yeah340 00:12:28,639 --> 00:12:30,199 well I guess that's a wait and see on341 00:12:30,199 --> 00:12:32,760 the future and see what happens um you342 00:12:32,760 --> 00:12:34,920 might look at it like an extra layer but343 00:12:34,920 --> 00:12:36,760 for those people that don't really do a344 00:12:36,760 --> 00:12:38,600 lot of commercial in the background it's345 00:12:38,600 --> 00:12:40,760 a chance that cuz commercial lending is346 00:12:40,760 --> 00:12:43,320 judgmental it gives them a chance to a347 00:12:43,320 --> 00:12:44,880 they check the application they make348 00:12:44,880 --> 00:12:46,480 sure it servicing Works they'll let you349 00:12:46,480 --> 00:12:48,760 know and then they push into the system350 00:12:48,760 --> 00:12:50,680 and they deal with credit direct it's351 00:12:50,680 --> 00:12:52,760 kind of a second line to check and make352 00:12:52,760 --> 00:12:54,199 sure it does it work before we've353 00:12:54,199 --> 00:12:55,800 actually done a credit search or354 00:12:55,800 --> 00:12:57,160 anything on the client so we're not355 00:12:57,160 --> 00:12:59,279 putting him like hurting a credit file356 00:12:59,279 --> 00:13:00,279 if it's not something we'll be able to357 00:13:00,279 --> 00:13:02,480 do in the background cuz on residential358 00:13:02,480 --> 00:13:03,680 you can do a lot of the research359 00:13:03,680 --> 00:13:05,720 yourself credit policies are online360 00:13:05,720 --> 00:13:07,519 you'll use bredia or something you'll361 00:13:07,519 --> 00:13:10,040 research you'll know pretty much 99%362 00:13:10,040 --> 00:13:11,199 whether that deal is going to go through363 00:13:11,199 --> 00:13:12,920 with the finance year but because364 00:13:12,920 --> 00:13:15,240 commercial is judgmental policies365 00:13:15,240 --> 00:13:16,720 generally are not online across most366 00:13:16,720 --> 00:13:18,880 lenders so you're relying because it can367 00:13:18,880 --> 00:13:20,839 change appetite can change across banks368 00:13:20,839 --> 00:13:23,079 with commercial so the banker is there369 00:13:23,079 --> 00:13:24,920 to help support and say Hey listen will370 00:13:24,920 --> 00:13:26,800 this work with A&Z they'll check the371 00:13:26,800 --> 00:13:28,120 servicing they're just double-checking372 00:13:28,120 --> 00:13:29,639 your work to make sure and then they'll373 00:13:29,639 --> 00:13:32,320 push it in cuz then they'll be 99% sure374 00:13:32,320 --> 00:13:34,040 that it'll work as well before we've375 00:13:34,040 --> 00:13:35,959 actually put a credit hit or something376 00:13:35,959 --> 00:13:37,839 on the client and so we don't do377 00:13:37,839 --> 00:13:39,079 anything adverse if it's something that378 00:13:39,079 --> 00:13:40,519 we may not be able to assist with but379 00:13:40,519 --> 00:13:41,920 they're there to check and make sure and380 00:13:41,920 --> 00:13:43,160 they'll do with the credit assessor in381 00:13:43,160 --> 00:13:45,560 the background as well yeah yeah I382 00:13:45,560 --> 00:13:47,959 actually do like it to be honest because383 00:13:47,959 --> 00:13:50,600 they do it day in day out all right and384 00:13:50,600 --> 00:13:52,519 you know I do quite a bit of commercial385 00:13:52,519 --> 00:13:53,959 deals but most of them are property386 00:13:53,959 --> 00:13:56,040 related as soon as you start involving387 00:13:56,040 --> 00:13:58,279 more complexity with trading businesses388 00:13:58,279 --> 00:14:00,519 and working capital and acquisition389 00:14:00,519 --> 00:14:04,279 loans overdrafts trade Finance invoice390 00:14:04,279 --> 00:14:06,839 Finance asset Finance like it's that's391 00:14:06,839 --> 00:14:08,680 the exciting stuff it's very it's very392 00:14:08,680 --> 00:14:10,639 broad it's a lot you can do and if393 00:14:10,639 --> 00:14:12,360 you're if you're not experienced you do394 00:14:12,360 --> 00:14:14,360 need someone who can kind of you know395 00:14:14,360 --> 00:14:16,480 guide you through it and help you396 00:14:16,480 --> 00:14:18,519 structure it in a way that's going to be397 00:14:18,519 --> 00:14:21,440 you know feasible for the customer and398 00:14:21,440 --> 00:14:24,759 uh and for the bank right um but I also399 00:14:24,759 --> 00:14:26,680 wanted to ask about the the teer400 00:14:26,680 --> 00:14:29,759 structure you have so each bank is a401 00:14:29,759 --> 00:14:31,000 little bit different some of them will402 00:14:31,000 --> 00:14:32,639 go up to 1 million anything a million to403 00:14:32,639 --> 00:14:34,240 three is another Banker anything 3404 00:14:34,240 --> 00:14:36,440 million to five is another A&Z has405 00:14:36,440 --> 00:14:39,240 recently increase that to 1.5 million406 00:14:39,240 --> 00:14:41,000 and that falls under small business407 00:14:41,000 --> 00:14:43,199 under small business you can do a lot of408 00:14:43,199 --> 00:14:48,560 cool stuff um I.E 30-year loans 80% lvr409 00:14:48,560 --> 00:14:51,759 if it's a if it's a property loan and uh410 00:14:51,759 --> 00:14:53,720 you've also got something called rapid411 00:14:53,720 --> 00:14:55,440 refinance and412 00:14:55,440 --> 00:14:58,240 streamline um and streamline you know I413 00:14:58,240 --> 00:14:59,959 I saw recent email saying that we can do414 00:14:59,959 --> 00:15:03,000 with one bz so I know I've just touched415 00:15:03,000 --> 00:15:05,600 on about three different things there um416 00:15:05,600 --> 00:15:07,399 do you mind elaborating a little bit on417 00:15:07,399 --> 00:15:08,920 that in terms of the te structure and418 00:15:08,920 --> 00:15:10,959 also that you know why 1 a half million419 00:15:10,959 --> 00:15:13,440 is you know probably the good spot to420 00:15:13,440 --> 00:15:14,920 yeah well you've passed the test you421 00:15:14,920 --> 00:15:16,399 remembered exactly what we've got in our422 00:15:16,399 --> 00:15:18,839 streamline space um well for a and z423 00:15:18,839 --> 00:15:21,000 side of it that one we did have 1424 00:15:21,000 --> 00:15:23,480 million um and through sort of assets we425 00:15:23,480 --> 00:15:25,440 increase that to 1 and a half which is426 00:15:25,440 --> 00:15:27,240 what we call we base that on our retail427 00:15:27,240 --> 00:15:29,240 credit policy which means yes we do have428 00:15:29,240 --> 00:15:31,240 a little bit that that exciting side429 00:15:31,240 --> 00:15:33,319 where we call it streamlined where we430 00:15:33,319 --> 00:15:35,440 can use a bass and self- declared income431 00:15:35,440 --> 00:15:37,399 to help support trading business so they432 00:15:37,399 --> 00:15:38,880 can look to buy their own occupied433 00:15:38,880 --> 00:15:40,440 property where we may not need434 00:15:40,440 --> 00:15:42,600 financials and then yes we have got our435 00:15:42,600 --> 00:15:45,600 raid refinance our 30-year loan terms 10436 00:15:45,600 --> 00:15:48,199 years interest only um some right now437 00:15:48,199 --> 00:15:50,480 we've got refinance fee wavers simple438 00:15:50,480 --> 00:15:52,839 switch in the background um that goes up439 00:15:52,839 --> 00:15:54,800 to a 1 and a half million above 1 and440 00:15:54,800 --> 00:15:56,360 half million then we move into wholesale441 00:15:56,360 --> 00:15:57,959 credit policy and that's where it442 00:15:57,959 --> 00:15:59,279 becomes judge judgmental in the443 00:15:59,279 --> 00:16:01,279 background and we don't have sort of the444 00:16:01,279 --> 00:16:03,519 system credit policy side of it it's445 00:16:03,519 --> 00:16:05,519 more of a judgmental where we might get446 00:16:05,519 --> 00:16:07,360 the two years of financials you need the447 00:16:07,360 --> 00:16:08,920 lease and you'll start having annual448 00:16:08,920 --> 00:16:11,079 reviews on the loans as well so for us449 00:16:11,079 --> 00:16:12,720 it's more the two different policies we'450 00:16:12,720 --> 00:16:15,120 use being retail and wholesale which I451 00:16:15,120 --> 00:16:16,560 do like because that's how we get that452 00:16:16,560 --> 00:16:18,680 sort of stuff in the background um and453 00:16:18,680 --> 00:16:20,279 then we also have a small tier of our454 00:16:20,279 --> 00:16:22,639 small business space for that 0 to 300455 00:16:22,639 --> 00:16:24,199 as well where we have our small business456 00:16:24,199 --> 00:16:25,600 Specialists that help support just457 00:16:25,600 --> 00:16:27,519 Branch or small clients wanting to set458 00:16:27,519 --> 00:16:30,000 up as well okay oh yeah that makes sense459 00:16:30,000 --> 00:16:33,880 and the higher you go the the products460 00:16:33,880 --> 00:16:38,519 become I guess more limited to an extent461 00:16:38,519 --> 00:16:42,480 um they the pricing is different the462 00:16:42,480 --> 00:16:46,480 pricing model the appetite um it's more463 00:16:46,480 --> 00:16:48,360 complex right it's higher risk to the464 00:16:48,360 --> 00:16:50,399 bank465 00:16:50,399 --> 00:16:52,920 so I want to ask a little bit about that466 00:16:52,920 --> 00:16:57,720 but also um around uh specialities right467 00:16:57,720 --> 00:17:00,480 because it's not just you know this is a468 00:17:00,480 --> 00:17:02,600 trading business or this is a you know469 00:17:02,600 --> 00:17:04,039 an employee wanting to purchase a470 00:17:04,039 --> 00:17:05,919 commercial property if they're in a471 00:17:05,919 --> 00:17:08,559 certain industry you might have472 00:17:08,559 --> 00:17:10,280 Specialists that understand that473 00:17:10,280 --> 00:17:14,199 industry and they understand how they uh474 00:17:14,199 --> 00:17:16,760 generate income their sales cycle you475 00:17:16,760 --> 00:17:19,199 know um you know cuz a lot of them say476 00:17:19,199 --> 00:17:21,199 for example agriculture the way they477 00:17:21,199 --> 00:17:23,959 receive income is different to another478 00:17:23,959 --> 00:17:27,400 type of business you know um medical so479 00:17:27,400 --> 00:17:30,400 doctors and uh in vets and whatnot they480 00:17:30,400 --> 00:17:33,320 receive income differently as well um481 00:17:33,320 --> 00:17:35,360 can you elaborate a little bit on that M482 00:17:35,360 --> 00:17:37,080 well this is the exciting part so you've483 00:17:37,080 --> 00:17:38,720 got to get into this more is the fact484 00:17:38,720 --> 00:17:40,039 that when you sit down with a client and485 00:17:40,039 --> 00:17:43,000 talk around what do you do and then all486 00:17:43,000 --> 00:17:44,520 of a sudden it brings out a whole heap487 00:17:44,520 --> 00:17:46,000 of everything in the background which488 00:17:46,000 --> 00:17:47,480 you know ranges from things like Bank489 00:17:47,480 --> 00:17:49,960 guarantees overdrafts working capital490 00:17:49,960 --> 00:17:52,480 business loans uh business credit cards491 00:17:52,480 --> 00:17:54,600 trade Finance that's I I find the492 00:17:54,600 --> 00:17:55,960 exciting part why I'm still in493 00:17:55,960 --> 00:17:57,640 commercial and then you're asking about494 00:17:57,640 --> 00:17:59,320 future plans for client and that's what495 00:17:59,320 --> 00:18:01,559 starts to uncover um everything that we496 00:18:01,559 --> 00:18:03,080 can provide in the background and this497 00:18:03,080 --> 00:18:05,919 is where the banker helps as well you're498 00:18:05,919 --> 00:18:07,640 right our small business space does have499 00:18:07,640 --> 00:18:09,799 a lot of policy low do and Lease do when500 00:18:09,799 --> 00:18:11,520 you move into above into the wholesale501 00:18:11,520 --> 00:18:14,159 credit policy yes it may limit like some502 00:18:14,159 --> 00:18:16,159 of the options you've got but all of a503 00:18:16,159 --> 00:18:18,440 sudden it opens up different Avenues of504 00:18:18,440 --> 00:18:21,080 like the trade Finance transactive for505 00:18:21,080 --> 00:18:22,520 business which is a different type of506 00:18:22,520 --> 00:18:24,200 internet banking platform for larger507 00:18:24,200 --> 00:18:26,840 clients when they've got accountants and508 00:18:26,840 --> 00:18:28,159 people who want to actually have access509 00:18:28,159 --> 00:18:30,200 to the accounts and do the book work in510 00:18:30,200 --> 00:18:31,840 the background so it also starts511 00:18:31,840 --> 00:18:35,000 bringing in additional support so our512 00:18:35,000 --> 00:18:36,880 relationship managers who do above 1 and513 00:18:36,880 --> 00:18:38,600 half million they have an assistant so514 00:18:38,600 --> 00:18:39,960 someone is actually there even if515 00:18:39,960 --> 00:18:42,480 they're on the road that client can call516 00:18:42,480 --> 00:18:44,640 get the assistant manager to help out517 00:18:44,640 --> 00:18:46,120 and then you start going to corporate518 00:18:46,120 --> 00:18:47,440 and the sudden corporate have two519 00:18:47,440 --> 00:18:49,120 assistants in the background so the520 00:18:49,120 --> 00:18:50,760 higher you get the more support your521 00:18:50,760 --> 00:18:52,919 business needs on the trading side of it522 00:18:52,919 --> 00:18:53,960 but then yeah you've got the little523 00:18:53,960 --> 00:18:56,760 add-ons so Health on the side which524 00:18:56,760 --> 00:18:58,280 obviously you know Everyone likes525 00:18:58,280 --> 00:18:59,799 doctors they do make some money at the526 00:18:59,799 --> 00:19:01,679 end of the day so they've got separate527 00:19:01,679 --> 00:19:03,640 policies that sit outside of it as well528 00:19:03,640 --> 00:19:05,840 we have agriculture which we're quite529 00:19:05,840 --> 00:19:07,600 strong across you know the regions as530 00:19:07,600 --> 00:19:09,280 well we have business centers across531 00:19:09,280 --> 00:19:11,320 where we'll probably ask for 3 years of532 00:19:11,320 --> 00:19:13,039 History to show because coming off the533 00:19:13,039 --> 00:19:15,320 back of say floods or something we might534 00:19:15,320 --> 00:19:16,760 we want to see what's been going on that535 00:19:16,760 --> 00:19:18,080 time and they've got different working536 00:19:18,080 --> 00:19:20,200 capital life cycles when you're thinking537 00:19:20,200 --> 00:19:22,720 it could be grain dairy in the538 00:19:22,720 --> 00:19:24,679 background they're going to you know how539 00:19:24,679 --> 00:19:26,880 they work is a lot different so yeah we540 00:19:26,880 --> 00:19:28,799 do have specialist Industries across541 00:19:28,799 --> 00:19:31,760 the areas as well um it's just because542 00:19:31,760 --> 00:19:33,880 yeah those businesses work different543 00:19:33,880 --> 00:19:36,480 yeah that makes sense so it's really544 00:19:36,480 --> 00:19:38,919 about supporting businesses when it545 00:19:38,919 --> 00:19:41,000 really comes down to it CU even if if546 00:19:41,000 --> 00:19:42,799 you're talking about an investor and547 00:19:42,799 --> 00:19:45,240 that investor doesn't have a business548 00:19:45,240 --> 00:19:46,760 and they're wanting to buy a commercial549 00:19:46,760 --> 00:19:48,799 property where they generate rental550 00:19:48,799 --> 00:19:50,720 income well the rental income is being551 00:19:50,720 --> 00:19:53,320 paid by business right that business is552 00:19:53,320 --> 00:19:54,840 is the tenant so you're actually553 00:19:54,840 --> 00:19:57,120 supporting business on in commercial554 00:19:57,120 --> 00:19:58,720 lending and that's what it seems like to555 00:19:58,720 --> 00:20:00,440 me more than anything else whereas556 00:20:00,440 --> 00:20:03,039 retail you're supporting the mom and dad557 00:20:03,039 --> 00:20:06,559 right with their personal stuff558 00:20:06,559 --> 00:20:09,320 um one thing that's come up in the past559 00:20:09,320 --> 00:20:13,200 was with some banks their pricing model560 00:20:13,200 --> 00:20:16,200 for commercial uses What's called the561 00:20:16,200 --> 00:20:21,240 BBS y or bbsw or Bank Bill swap rate and562 00:20:21,240 --> 00:20:24,679 then there's a uh you know bank or base563 00:20:24,679 --> 00:20:26,520 rate and there you know there's a you564 00:20:26,520 --> 00:20:28,919 know a margin on top Etc and then you565 00:20:28,919 --> 00:20:31,280 sort of you know they call it a Market's566 00:20:31,280 --> 00:20:32,600 loan sometimes where it actually567 00:20:32,600 --> 00:20:36,360 fluctuates monthly um or sometimes three568 00:20:36,360 --> 00:20:39,880 monthly or you know quarterly does a do569 00:20:39,880 --> 00:20:41,760 that as well is that anything over 1 and570 00:20:41,760 --> 00:20:44,159 a half million and onwards that they571 00:20:44,159 --> 00:20:47,280 sort of repic it on a regular basis yeah572 00:20:47,280 --> 00:20:49,760 look across the whole spectrum of the573 00:20:49,760 --> 00:20:51,720 areas we deal with and pricing is574 00:20:51,720 --> 00:20:53,480 individual so it depends on what you're575 00:20:53,480 --> 00:20:54,960 looking at doing so if you're just576 00:20:54,960 --> 00:20:56,720 looking at buying an investment property577 00:20:56,720 --> 00:20:58,760 what comes into play is what's the loan578 00:20:58,760 --> 00:21:01,440 to value ratio we're looking at um579 00:21:01,440 --> 00:21:03,360 sometimes even you know they lease the580 00:21:03,360 --> 00:21:05,480 tenant how long they're in there for um581 00:21:05,480 --> 00:21:08,120 to they you bank with a andz or not um582 00:21:08,120 --> 00:21:09,039 and then all of a sudden it might be583 00:21:09,039 --> 00:21:10,919 industry Once you turn into a trading584 00:21:10,919 --> 00:21:12,760 business as well if that's what you're585 00:21:12,760 --> 00:21:15,120 looking at doing a lot of things go into586 00:21:15,120 --> 00:21:17,039 factor into it whereas on home loans587 00:21:17,039 --> 00:21:18,480 generally it's just the loan to value588 00:21:18,480 --> 00:21:19,880 ratio and how much you're looking at589 00:21:19,880 --> 00:21:22,120 borrowing so there's only two factors so590 00:21:22,120 --> 00:21:23,880 on the commercial we have maybe four or591 00:21:23,880 --> 00:21:26,279 five different things that go into it um592 00:21:26,279 --> 00:21:27,640 and then that goes across the whole593 00:21:27,640 --> 00:21:28,760 Spectrum594 00:21:28,760 --> 00:21:30,440 but once you start do moving up into the595 00:21:30,440 --> 00:21:31,760 Business Bank space you're using596 00:21:31,760 --> 00:21:33,120 wholesale credit sometimes in the597 00:21:33,120 --> 00:21:34,320 background which means they've got598 00:21:34,320 --> 00:21:36,360 access to be able to ask for some more599 00:21:36,360 --> 00:21:38,000 discounts off the back of it with the600 00:21:38,000 --> 00:21:39,760 more lending you're getting but then all601 00:21:39,760 --> 00:21:41,360 of a sudden the complexity of the client602 00:21:41,360 --> 00:21:43,559 where yes you have you got a standard603 00:21:43,559 --> 00:21:45,039 business loan where you'll just have604 00:21:45,039 --> 00:21:47,360 your quarterly loan admin fee then you605 00:21:47,360 --> 00:21:49,880 might have your line of credit um which606 00:21:49,880 --> 00:21:52,279 is an working capital overdraft all of a607 00:21:52,279 --> 00:21:54,120 sudden that's price different for risk608 00:21:54,120 --> 00:21:55,880 because obviously you can keep eating609 00:21:55,880 --> 00:21:57,799 away and we won't know that Mr repayment610 00:21:57,799 --> 00:21:59,880 really until you hit the limit and then611 00:21:59,880 --> 00:22:02,640 you'll start coming yes like your um BBS612 00:22:02,640 --> 00:22:04,720 y plus a margin where you've actually613 00:22:04,720 --> 00:22:06,320 just got a facility sitting there that's614 00:22:06,320 --> 00:22:08,600 not always drawn and then you know615 00:22:08,600 --> 00:22:09,880 you've got commercial construction where616 00:22:09,880 --> 00:22:11,760 you're only using it as you draw it as617 00:22:11,760 --> 00:22:14,559 well so you're right there is a a range618 00:22:14,559 --> 00:22:16,279 of products it's not just a standard oh619 00:22:16,279 --> 00:22:17,520 I'm getting a loan with an offset620 00:22:17,520 --> 00:22:19,520 account there's a lot of different and621 00:22:19,520 --> 00:22:20,600 you're trying and structure it to make622 00:22:20,600 --> 00:22:22,520 sure that it's fitting what the client623 00:22:22,520 --> 00:22:24,760 needs um because we have transactional624 00:22:24,760 --> 00:22:26,200 banking managers Who come out for the625 00:22:26,200 --> 00:22:28,440 bigger clients to talk with them okay626 00:22:28,440 --> 00:22:30,320 maybe it's hedging okay you're importing627 00:22:30,320 --> 00:22:31,760 from overseas maybe we should look at628 00:22:31,760 --> 00:22:32,919 hedging some of the funds you're629 00:22:32,919 --> 00:22:34,440 importing to take advantage of what the630 00:22:34,440 --> 00:22:36,200 rates are doing right now so the631 00:22:36,200 --> 00:22:38,559 complexity gets up there where we add on632 00:22:38,559 --> 00:22:40,200 what that client needs to help give them633 00:22:40,200 --> 00:22:42,559 the best you know support I love that634 00:22:42,559 --> 00:22:45,120 because um any client will say okay635 00:22:45,120 --> 00:22:46,120 you're trying to work with me what I636 00:22:46,120 --> 00:22:47,360 need but really all I need is the637 00:22:47,360 --> 00:22:48,520 cheapest rate638 00:22:48,520 --> 00:22:51,080 ongoing but it's like it's not as simple639 00:22:51,080 --> 00:22:53,799 as giving you that because um the way I640 00:22:53,799 --> 00:22:55,520 explain to people is that you know641 00:22:55,520 --> 00:22:57,520 commercial if you think about the word642 00:22:57,520 --> 00:22:59,240 it's it's it's Commerce right it's doing643 00:22:59,240 --> 00:23:00,880 business with each other so the644 00:23:00,880 --> 00:23:03,520 transaction itself is about making money645 00:23:03,520 --> 00:23:06,120 and about everybody making money so when646 00:23:06,120 --> 00:23:09,279 people try to put on the you know the647 00:23:09,279 --> 00:23:11,559 filter of I want to get money from the648 00:23:11,559 --> 00:23:13,919 bank where I make money but they make649 00:23:13,919 --> 00:23:16,440 nothing they're not the right customer650 00:23:16,440 --> 00:23:17,600 they're not they're not looking at from651 00:23:17,600 --> 00:23:20,000 the right angle because with consumer652 00:23:20,000 --> 00:23:22,000 lending it's there's obviously a lot653 00:23:22,000 --> 00:23:23,480 more transactions that happen on a654 00:23:23,480 --> 00:23:27,279 day-to-day basis um and it's sort of you655 00:23:27,279 --> 00:23:29,520 know tried to design in a way to protect656 00:23:29,520 --> 00:23:31,799 the consumer so the attitude is how do I657 00:23:31,799 --> 00:23:34,279 get the best rate lowest fees and then658 00:23:34,279 --> 00:23:35,559 maintain that and you know keep659 00:23:35,559 --> 00:23:37,400 switching to get that but in commercial660 00:23:37,400 --> 00:23:39,960 lending it's not as easy to do that uh661 00:23:39,960 --> 00:23:42,279 refinancing is tricky there's a lot more662 00:23:42,279 --> 00:23:45,480 upfront cost to get in um663 00:23:45,480 --> 00:23:47,880 the if you're wanting to get an offset664 00:23:47,880 --> 00:23:50,640 account well most banks don't offer them665 00:23:50,640 --> 00:23:53,320 AZ does if from from my knowledge it's666 00:23:53,320 --> 00:23:56,120 sub 65% but recently they've removed it667 00:23:56,120 --> 00:23:58,279 from the least stock product so it's not668 00:23:58,279 --> 00:24:00,279 available for Le stock and I think why669 00:24:00,279 --> 00:24:02,159 well it's because you got to make money670 00:24:02,159 --> 00:24:05,880 and if somebody fully offsets their loan671 00:24:05,880 --> 00:24:06,960 you've just got and done this672 00:24:06,960 --> 00:24:08,440 transaction lent them the money so they673 00:24:08,440 --> 00:24:10,640 can benefit well you make nothing you674 00:24:10,640 --> 00:24:12,919 make a quarterly fee out of it but675 00:24:12,919 --> 00:24:14,520 you're still as a bank you're still676 00:24:14,520 --> 00:24:16,320 borrowing that money you're not lending677 00:24:16,320 --> 00:24:18,360 out your own money so then now you have678 00:24:18,360 --> 00:24:19,679 to still pay interest on it so you're679 00:24:19,679 --> 00:24:21,480 actually losing money if somebody keeps680 00:24:21,480 --> 00:24:24,120 upsetting am I right I'm not sure if the681 00:24:24,120 --> 00:24:26,159 removal from the Le stock product was682 00:24:26,159 --> 00:24:28,919 around making money but but um obviously683 00:24:28,919 --> 00:24:30,640 it's one of those products where you buy684 00:24:30,640 --> 00:24:32,440 an investment property you want the685 00:24:32,440 --> 00:24:34,480 maximum taxation Advantage for it so686 00:24:34,480 --> 00:24:36,000 it's less likely you probably going to687 00:24:36,000 --> 00:24:38,640 use an offset account for it um I688 00:24:38,640 --> 00:24:40,559 probably don't have the exact answer why689 00:24:40,559 --> 00:24:42,520 it got removed from the lease stock side690 00:24:42,520 --> 00:24:43,799 of it but I don't think it's because we691 00:24:43,799 --> 00:24:45,039 want to make more money off the end of692 00:24:45,039 --> 00:24:46,799 it um but it's probably a product you're693 00:24:46,799 --> 00:24:48,799 not going to really offset if you've got694 00:24:48,799 --> 00:24:50,240 a home loan or something you know you695 00:24:50,240 --> 00:24:51,600 ask your accountant what's the best696 00:24:51,600 --> 00:24:54,399 taxwise to do it you bought it for a697 00:24:54,399 --> 00:24:56,159 investment to make some money and698 00:24:56,159 --> 00:24:57,840 Taxation claims off the back of it so699 00:24:57,840 --> 00:24:59,320 it's probably not what going to park700 00:24:59,320 --> 00:25:04,080 your money in the background um but yeah701 00:25:04,080 --> 00:25:06,080 no that's true I mean as I deal with702 00:25:06,080 --> 00:25:07,919 investors you know a lot of them do have703 00:25:07,919 --> 00:25:10,720 a a principal place of residence a PPR704 00:25:10,720 --> 00:25:13,279 and um that's typically what they want705 00:25:13,279 --> 00:25:15,679 offset it's only when they have excess706 00:25:15,679 --> 00:25:17,200 Capital that they're like where do I put707 00:25:17,200 --> 00:25:19,640 it because if I'm paying a higher rate708 00:25:19,640 --> 00:25:21,440 on the commercial loan I want to offset709 00:25:21,440 --> 00:25:24,200 that but yeah it's not designed for that710 00:25:24,200 --> 00:25:26,679 so you know that's basically what you711 00:25:26,679 --> 00:25:29,200 just said um um but the other thing is712 00:25:29,200 --> 00:25:32,080 what I've seen um you know there's no713 00:25:32,080 --> 00:25:33,559 Financial advice here but I've heard714 00:25:33,559 --> 00:25:36,320 I've seen where even family members you715 00:25:36,320 --> 00:25:38,240 know will put their money into the kids716 00:25:38,240 --> 00:25:40,360 account for example to offset it in the717 00:25:40,360 --> 00:25:41,960 home loans or whatever just temporarily718 00:25:41,960 --> 00:25:43,919 so they're still reducing their interest719 00:25:43,919 --> 00:25:47,279 but it's not their Capital as such so720 00:25:47,279 --> 00:25:50,159 yeah ANZ has also got some pretty cool721 00:25:50,159 --> 00:25:54,760 um offers where they'll um wave the fee722 00:25:54,760 --> 00:25:57,640 um the the application fee uh and also723 00:25:57,640 --> 00:25:59,360 to cover the valuation fee cuz a724 00:25:59,360 --> 00:26:01,760 valuation for a commercial property can725 00:26:01,760 --> 00:26:04,279 cost thousands of dollars right and it's726 00:26:04,279 --> 00:26:06,720 usually at the customers cost is that727 00:26:06,720 --> 00:26:07,880 something that's still ongoing at the728 00:26:07,880 --> 00:26:09,480 moment yeah I guess it's probably a729 00:26:09,480 --> 00:26:11,000 conversation you have you have with730 00:26:11,000 --> 00:26:12,520 people a lot when they come to you and731 00:26:12,520 --> 00:26:13,919 you talk around the Returns on a732 00:26:13,919 --> 00:26:16,360 commercial and residential is when733 00:26:16,360 --> 00:26:18,120 you're used to buying residential734 00:26:18,120 --> 00:26:19,399 there's no cost normally there's no735 00:26:19,399 --> 00:26:20,960 application fee there's no valuation736 00:26:20,960 --> 00:26:22,559 there's nothing but when you're first737 00:26:22,559 --> 00:26:24,120 time into a commercial and someone says738 00:26:24,120 --> 00:26:26,080 to you oh your application fees is you739 00:26:26,080 --> 00:26:29,000 know probably 75 or .5% of the loan740 00:26:29,000 --> 00:26:30,360 amount and you're borrowing a million741 00:26:30,360 --> 00:26:31,559 dollar and you say oh your application742 00:26:31,559 --> 00:26:34,039 is $5,000 you probably you die in the743 00:26:34,039 --> 00:26:36,000 background thinking what but you know744 00:26:36,000 --> 00:26:39,279 those whove invested or in commercial um745 00:26:39,279 --> 00:26:40,799 understand they hey there is more of a746 00:26:40,799 --> 00:26:42,440 cost attach to it because there's a cost747 00:26:42,440 --> 00:26:43,919 to serve you've got the bank there to748 00:26:43,919 --> 00:26:45,559 support they're there for you ongoing as749 00:26:45,559 --> 00:26:47,799 well um but yeah when you talk through750 00:26:47,799 --> 00:26:49,880 the cost sometimes attached with it um751 00:26:49,880 --> 00:26:51,520 but yes right now in our small business752 00:26:51,520 --> 00:26:53,520 space especially um up until the end of753 00:26:53,520 --> 00:26:54,960 the year if you're submitting before the754 00:26:54,960 --> 00:26:57,039 31st of December then yes we're waving755 00:26:57,039 --> 00:26:59,200 the application fee for refinances and756 00:26:59,200 --> 00:27:00,720 we're covering the valuation cost up to757 00:27:00,720 --> 00:27:03,080 2 Grand cuz generally your application758 00:27:03,080 --> 00:27:04,919 fee say across different banks might759 00:27:04,919 --> 00:27:07,880 range from like .5 to 75% of the loan760 00:27:07,880 --> 00:27:10,320 amount and then your valuation might be761 00:27:10,320 --> 00:27:14,240 1,000 2,000 3,000 depending on the size762 00:27:14,240 --> 00:27:15,679 um and then outside of that it's763 00:27:15,679 --> 00:27:17,440 generally just your government charges764 00:27:17,440 --> 00:27:18,720 and stuff but there there's definitely a765 00:27:18,720 --> 00:27:20,880 high cost for the commercial yeah uh766 00:27:20,880 --> 00:27:22,200 that comes across but yes we do have a767 00:27:22,200 --> 00:27:23,760 fee wer on until the end of the year768 00:27:23,760 --> 00:27:25,520 it's been extended a couple of times so769 00:27:25,520 --> 00:27:26,720 you know we're holding our breath we'll770 00:27:26,720 --> 00:27:28,919 see what happens but it is a competitive771 00:27:28,919 --> 00:27:31,480 market kind of similar with residential772 00:27:31,480 --> 00:27:33,640 sometimes in terms of commercial um but773 00:27:33,640 --> 00:27:35,159 with our recent changes in our small774 00:27:35,159 --> 00:27:37,640 business space and our lease type775 00:27:37,640 --> 00:27:40,279 product um we want to be about a market776 00:27:40,279 --> 00:27:42,399 and we're here to support clients yeah777 00:27:42,399 --> 00:27:44,399 yeah no um the reason I have you one is778 00:27:44,399 --> 00:27:46,720 because I'm a big supporter of AZ and779 00:27:46,720 --> 00:27:49,399 I've got a few uh deals at the moment780 00:27:49,399 --> 00:27:52,320 with Az all across the country and I781 00:27:52,320 --> 00:27:53,919 find it interesting that it's not based782 00:27:53,919 --> 00:27:55,880 on where the customer is buying it's783 00:27:55,880 --> 00:27:57,679 based on where they live and and it784 00:27:57,679 --> 00:27:59,080 makes sense it's because you know they785 00:27:59,080 --> 00:28:01,519 need to have a a local Banker that786 00:28:01,519 --> 00:28:04,279 understands I guess the one they can787 00:28:04,279 --> 00:28:06,799 meet the customer you know know your kyc788 00:28:06,799 --> 00:28:10,080 know your customer um but also so they789 00:28:10,080 --> 00:28:12,440 can maintain a relationship after790 00:28:12,440 --> 00:28:13,760 settlement right they want to still have791 00:28:13,760 --> 00:28:16,080 a point of contact afterwards so if792 00:28:16,080 --> 00:28:17,399 they're in a different state it's793 00:28:17,399 --> 00:28:20,200 obviously harder to to manage um so I've794 00:28:20,200 --> 00:28:22,240 got one like two in two different parts795 00:28:22,240 --> 00:28:25,039 of Queensland couple in Melbourne New796 00:28:25,039 --> 00:28:27,159 South Wales and it's all based on where797 00:28:27,159 --> 00:28:29,600 the CL lives so it's good it gets me to798 00:28:29,600 --> 00:28:32,279 meet different uh Bankers all across the799 00:28:32,279 --> 00:28:33,880 country and you've been really helpful800 00:28:33,880 --> 00:28:35,559 in introducing me to the right people so801 00:28:35,559 --> 00:28:37,640 thank you for that um that's why we call802 00:28:37,640 --> 00:28:39,080 them relationship managers because803 00:28:39,080 --> 00:28:40,080 they're there to help the clients804 00:28:40,080 --> 00:28:42,000 ongoing in the background help sign loan805 00:28:42,000 --> 00:28:44,399 documents yes do the kyc part of it but806 00:28:44,399 --> 00:28:46,480 it's also ongoing say 6 months down the807 00:28:46,480 --> 00:28:48,679 track they ask oh the tenant's moving808 00:28:48,679 --> 00:28:50,600 out or I need to rev my interest rates809 00:28:50,600 --> 00:28:52,480 or I need another account or now I'm810 00:28:52,480 --> 00:28:54,480 going to open a second store then811 00:28:54,480 --> 00:28:56,399 somebody local knows them understands812 00:28:56,399 --> 00:28:57,760 their business and helps to to tailor813 00:28:57,760 --> 00:28:59,360 the next lot of products as they grow as814 00:28:59,360 --> 00:29:02,600 well m one of the questions that comes815 00:29:02,600 --> 00:29:04,519 up a lot for me and I always have to816 00:29:04,519 --> 00:29:06,080 explain this to clients from my817 00:29:06,080 --> 00:29:07,320 perspective but I'd like to hear it from818 00:29:07,320 --> 00:29:09,519 you it's what happens if someone does819 00:29:09,519 --> 00:29:13,559 get a Le stock loan and the tenant moves820 00:29:13,559 --> 00:29:16,880 out and it's vacant so it's coming up821 00:29:16,880 --> 00:29:19,559 towards the end and obviously that loan822 00:29:19,559 --> 00:29:21,559 is not going to be renewed unless you've823 00:29:21,559 --> 00:29:23,000 got tenants because that's how the the824 00:29:23,000 --> 00:29:24,240 loan is being825 00:29:24,240 --> 00:29:26,919 serviced what does the bank do in that826 00:29:26,919 --> 00:29:28,039 situation827 00:29:28,039 --> 00:29:29,480 generally it's trying to work with the828 00:29:29,480 --> 00:29:31,200 client we normally don't if they've829 00:29:31,200 --> 00:29:33,559 moved out midterm we actually normally830 00:29:33,559 --> 00:29:34,840 don't know because if the rep payments831 00:29:34,840 --> 00:29:36,120 are still being made it's not something832 00:29:36,120 --> 00:29:37,799 we monitor until it comes up for its833 00:29:37,799 --> 00:29:39,880 renewal or if they're on annual review834 00:29:39,880 --> 00:29:41,559 in the background normally it's working835 00:29:41,559 --> 00:29:43,760 with the client to see hey how long do836 00:29:43,760 --> 00:29:45,000 they think it's going to take making837 00:29:45,000 --> 00:29:46,960 sure that the property's on the market838 00:29:46,960 --> 00:29:49,159 no one's going to be putting people into839 00:29:49,159 --> 00:29:50,679 no one wants to be putting people into840 00:29:50,679 --> 00:29:52,480 sort of any lending services or selling841 00:29:52,480 --> 00:29:54,039 a property in the background sometimes842 00:29:54,039 --> 00:29:56,240 it's just a set vacant period do they843 00:29:56,240 --> 00:29:57,559 have enough support to make their844 00:29:57,559 --> 00:29:59,399 payments in that short period of time do845 00:29:59,399 --> 00:30:01,080 we need to restructure it into a small846 00:30:01,080 --> 00:30:02,760 interest only or something if it was on847 00:30:02,760 --> 00:30:04,880 principal and interest more it's working848 00:30:04,880 --> 00:30:06,840 with people in the background and that's849 00:30:06,840 --> 00:30:08,880 just an ongoing discussion that happens850 00:30:08,880 --> 00:30:10,279 individually in the background so it's851 00:30:10,279 --> 00:30:12,919 important that the um the customers stay852 00:30:12,919 --> 00:30:16,120 in contact and and open and honest about853 00:30:16,120 --> 00:30:18,159 it and not hiding in the background854 00:30:18,159 --> 00:30:19,279 saying what do I do the bank's going to855 00:30:19,279 --> 00:30:20,960 take my property cuz that's the fear856 00:30:20,960 --> 00:30:24,519 they all have but I mean from my857 00:30:24,519 --> 00:30:26,200 understanding the bank can't really just858 00:30:26,200 --> 00:30:27,919 go and repossess it unless they go859 00:30:27,919 --> 00:30:29,760 through the you know standard procedure860 00:30:29,760 --> 00:30:33,799 of you know um I don't know 30 days 90861 00:30:33,799 --> 00:30:35,679 days out and then there's judgment and862 00:30:35,679 --> 00:30:37,519 things like that they have to go through863 00:30:37,519 --> 00:30:38,399 and that's only if you're not864 00:30:38,399 --> 00:30:40,200 communicating and you're not trying to865 00:30:40,200 --> 00:30:41,919 make repayments or trying to be flexible866 00:30:41,919 --> 00:30:44,159 and you know um setting up the right867 00:30:44,159 --> 00:30:46,480 structures to help you and the bank if868 00:30:46,480 --> 00:30:48,039 you just avoid them and stop taking869 00:30:48,039 --> 00:30:49,760 calls and not reply to letters that's870 00:30:49,760 --> 00:30:50,640 what's going to happen right they're871 00:30:50,640 --> 00:30:53,399 going to come knocking I haven't seen it872 00:30:53,399 --> 00:30:55,200 but yeah you'd like to think so873 00:30:55,200 --> 00:30:57,760 communication is the key yeah so it's874 00:30:57,760 --> 00:31:00,240 not as risky as as875 00:31:00,240 --> 00:31:02,240 perceived yes of course if you didn't876 00:31:02,240 --> 00:31:04,000 get the right asset and this is why I do877 00:31:04,000 --> 00:31:06,440 like to work with um you know reputable878 00:31:06,440 --> 00:31:09,559 commercial um buyers agents because879 00:31:09,559 --> 00:31:11,039 there's a lot more that goes into880 00:31:11,039 --> 00:31:13,519 selecting the property negotiating it881 00:31:13,519 --> 00:31:15,360 and then doing it due diligence to make882 00:31:15,360 --> 00:31:17,639 sure there is a solid investment because883 00:31:17,639 --> 00:31:19,799 the highest risk is uh you know884 00:31:19,799 --> 00:31:22,559 long-term vacancy which leads me to my885 00:31:22,559 --> 00:31:26,159 next question is I found out that A&Z886 00:31:26,159 --> 00:31:30,279 sees retail properties as higher risk887 00:31:30,279 --> 00:31:32,799 and they cap the lvr Lear to Value ratio888 00:31:32,799 --> 00:31:36,039 at 55% mhm that's only on the least doct889 00:31:36,039 --> 00:31:37,679 though if it's full duck you can go890 00:31:37,679 --> 00:31:39,799 higher because you're um not necessar891 00:31:39,799 --> 00:31:40,960 full duck but you know the other892 00:31:40,960 --> 00:31:42,679 products where you're you know using893 00:31:42,679 --> 00:31:45,159 other forms of income to servic it is894 00:31:45,159 --> 00:31:48,200 this because of Co it's this is why we895 00:31:48,200 --> 00:31:50,240 call Commercial judgmental and why we896 00:31:50,240 --> 00:31:51,880 give you a banker because this will move897 00:31:51,880 --> 00:31:54,679 up and down but off yes you're you're on898 00:31:54,679 --> 00:31:56,200 the right Mark where you know coming off899 00:31:56,200 --> 00:31:57,919 the back of Co a lot of retail stores900 00:31:57,919 --> 00:32:00,320 did close down and hav't all come back901 00:32:00,320 --> 00:32:02,559 to normal trading in the background um902 00:32:02,559 --> 00:32:04,600 it is we can actually on a caseby casee903 00:32:04,600 --> 00:32:06,919 basis look at more than that 55 because904 00:32:06,919 --> 00:32:08,120 commercial lending doesn't always have905 00:32:08,120 --> 00:32:10,279 to be secured if you're thinking lease906 00:32:10,279 --> 00:32:12,399 stock probably more likely yes but if907 00:32:12,399 --> 00:32:13,519 you're thinking there's a trading908 00:32:13,519 --> 00:32:14,840 business or other income in the909 00:32:14,840 --> 00:32:16,720 background we can potentially use to910 00:32:16,720 --> 00:32:19,360 support it we can look at a higher lvr911 00:32:19,360 --> 00:32:21,919 for it but policy side for the moment912 00:32:21,919 --> 00:32:23,760 yes and I think that probably little bit913 00:32:23,760 --> 00:32:25,559 through Co it came to part cuz a lot of914 00:32:25,559 --> 00:32:27,120 stores were closing down you've you've915 00:32:27,120 --> 00:32:29,519 seen it as you walk around but it's not916 00:32:29,519 --> 00:32:32,919 a a hard and fast rule I wouldn't think917 00:32:32,919 --> 00:32:34,600 oh we're not thinking about a and z for918 00:32:34,600 --> 00:32:36,200 this application because they've got a919 00:32:36,200 --> 00:32:39,840 55% OVR I'd still present it you know um920 00:32:39,840 --> 00:32:41,480 because we'll still consider stuff for a921 00:32:41,480 --> 00:32:43,200 strong client you might have extra922 00:32:43,200 --> 00:32:45,000 Equity available maybe in your923 00:32:45,000 --> 00:32:47,279 residential property to help support it924 00:32:47,279 --> 00:32:49,039 in the background to get you that extra925 00:32:49,039 --> 00:32:51,600 funds you might at 80% so sometimes926 00:32:51,600 --> 00:32:52,679 we'll work with you to make sure927 00:32:52,679 --> 00:32:54,320 something works or see if we can but it928 00:32:54,320 --> 00:32:56,440 is judgmental because it can change929 00:32:56,440 --> 00:32:59,960 appetite change across Banks there is930 00:32:59,960 --> 00:33:02,440 some hard and fast rules when it comes931 00:33:02,440 --> 00:33:04,480 to certain types of property though932 00:33:04,480 --> 00:33:06,519 because you know if we look at933 00:33:06,519 --> 00:33:09,200 commercial property you know standard934 00:33:09,200 --> 00:33:11,519 property you know it comes down to you935 00:33:11,519 --> 00:33:15,559 know retail um office and Industrial um936 00:33:15,559 --> 00:33:17,399 as soon as you start going outside of937 00:33:17,399 --> 00:33:21,120 that there's obviously agriculture you938 00:33:21,120 --> 00:33:24,440 know Prime production um there's you939 00:33:24,440 --> 00:33:27,840 know pubs Clubs petol St940 00:33:27,840 --> 00:33:29,919 child Cent Age Care Cent it can get bit941 00:33:29,919 --> 00:33:32,600 more specialized when it comes to those942 00:33:32,600 --> 00:33:34,039 specialized943 00:33:34,039 --> 00:33:36,840 assets does a and z look at them Case by944 00:33:36,840 --> 00:33:39,360 case or do they also have some hard and945 00:33:39,360 --> 00:33:42,279 fast say no that's a total exclusion I.E946 00:33:42,279 --> 00:33:43,720 a brothel for947 00:33:43,720 --> 00:33:45,799 example you know anything that's going948 00:33:45,799 --> 00:33:47,639 to your reputational risk is probably a949 00:33:47,639 --> 00:33:50,279 definite no when you think about that um950 00:33:50,279 --> 00:33:52,399 but outside of that it is Case by case951 00:33:52,399 --> 00:33:53,880 there is credit policy in the background952 00:33:53,880 --> 00:33:55,600 for like a petrol station might have a953 00:33:55,600 --> 00:33:58,159 50% lvr attached to to it but you got to954 00:33:58,159 --> 00:33:59,760 step back and sometimes take your955 00:33:59,760 --> 00:34:01,519 residential hat off not everything needs956 00:34:01,519 --> 00:34:04,240 to be secured M we might say yes in a957 00:34:04,240 --> 00:34:06,639 soft 50% over up but we'll consider up958 00:34:06,639 --> 00:34:09,199 to 65 or 70 um it's just we might959 00:34:09,199 --> 00:34:10,918 actually structure it slightly different960 00:34:10,918 --> 00:34:13,159 we might do a partially secured loan or961 00:34:13,159 --> 00:34:15,599 we might do say 50% is fully secured and962 00:34:15,599 --> 00:34:18,000 a small portion is unsecured so this is963 00:34:18,000 --> 00:34:19,520 where we work with you to bring what964 00:34:19,520 --> 00:34:22,119 options we've got available um because965 00:34:22,119 --> 00:34:23,520 commercial lending doesn't always have966 00:34:23,520 --> 00:34:26,119 to have security so what do you mean by967 00:34:26,119 --> 00:34:28,520 secured and unsecured just for the968 00:34:28,520 --> 00:34:30,560 listeners yeah so secured is when you've969 00:34:30,560 --> 00:34:31,960 got property to support it in the970 00:34:31,960 --> 00:34:34,239 background um there are other ways of971 00:34:34,239 --> 00:34:36,320 securing loans it's not just property if972 00:34:36,320 --> 00:34:38,000 you're in angry sometimes it might be973 00:34:38,000 --> 00:34:39,679 stock that you've got like it could be974 00:34:39,679 --> 00:34:41,560 the actual cows that are out in the975 00:34:41,560 --> 00:34:43,679 dairy um or it could be a term deposit976 00:34:43,679 --> 00:34:45,480 to support like maybe you've got a good977 00:34:45,480 --> 00:34:47,239 cash base but your accountants give you978 00:34:47,239 --> 00:34:49,599 advice saying brow money in the business979 00:34:49,599 --> 00:34:51,239 we can use a term deposit to support980 00:34:51,239 --> 00:34:53,079 business lending and therefore you've981 00:34:53,079 --> 00:34:55,000 got more of a some tax you add back in982 00:34:55,000 --> 00:34:57,440 the business that's an option um but983 00:34:57,440 --> 00:34:59,240 yeah when we say secured it generally984 00:34:59,240 --> 00:35:00,480 does mean that we've got something985 00:35:00,480 --> 00:35:02,560 tangible whether that might even just be986 00:35:02,560 --> 00:35:04,839 water rights to an aggre property but it987 00:35:04,839 --> 00:35:06,920 generally it is property to support it988 00:35:06,920 --> 00:35:08,880 and then the other part is partially989 00:35:08,880 --> 00:35:10,560 when we've got a little bit of unsecured990 00:35:10,560 --> 00:35:15,160 or totally unsecured okay what about um991 00:35:15,160 --> 00:35:17,480 gsa's corporate992 00:35:17,480 --> 00:35:19,920 guarantees GSA standing for General993 00:35:19,920 --> 00:35:22,400 Security agreement corporate guarantee994 00:35:22,400 --> 00:35:24,079 it's a company guaranteeing as opposed995 00:35:24,079 --> 00:35:26,079 to individual guarantees is this996 00:35:26,079 --> 00:35:28,680 considered security to the bank so it's997 00:35:28,680 --> 00:35:30,599 taken generally when there is a trading998 00:35:30,599 --> 00:35:32,000 business in the background and we're999 00:35:32,000 --> 00:35:33,599 using the income from the business to1000 00:35:33,599 --> 00:35:35,640 help support the debt that's normally1001 00:35:35,640 --> 00:35:37,280 where it comes like say if you are a1002 00:35:37,280 --> 00:35:39,640 mechanic and you have your own property1003 00:35:39,640 --> 00:35:42,240 and you trade from it then obviously the1004 00:35:42,240 --> 00:35:43,960 commercial loan we've got is relying on1005 00:35:43,960 --> 00:35:45,760 the trading business paying the rent or1006 00:35:45,760 --> 00:35:47,359 paying it in the background generally1007 00:35:47,359 --> 00:35:49,200 we'll consider taking a general security1008 00:35:49,200 --> 00:35:51,040 agreement it just kind of says that hey1009 00:35:51,040 --> 00:35:52,640 that business is liable for The Debs as1010 00:35:52,640 --> 00:35:54,640 well so if something happens if there's1011 00:35:54,640 --> 00:35:56,880 assets in there then we got to make sure1012 00:35:56,880 --> 00:35:58,680 we get paid or the loan gets paid off1013 00:35:58,680 --> 00:36:00,920 the back of it yeah yeah that makes1014 00:36:00,920 --> 00:36:03,160 sense and that can restrict them if they1015 00:36:03,160 --> 00:36:05,040 need to get working capital in the1016 00:36:05,040 --> 00:36:07,720 future right so if they've got a GSA um1017 00:36:07,720 --> 00:36:10,400 against their trading business to buy a1018 00:36:10,400 --> 00:36:12,520 property and they go with a and z but1019 00:36:12,520 --> 00:36:14,640 their business banking is with Westpac1020 00:36:14,640 --> 00:36:17,359 for example and then Westpac you know1021 00:36:17,359 --> 00:36:19,400 offer them an overdraft and say oh look1022 00:36:19,400 --> 00:36:21,200 we can see all your money's coming in we1023 00:36:21,200 --> 00:36:22,520 can give you half a million dollar1024 00:36:22,520 --> 00:36:24,920 overdraft you just have to sign here and1025 00:36:24,920 --> 00:36:26,240 then they do a search and say wait a1026 00:36:26,240 --> 00:36:29,160 minute az's got a GSA over what happens1027 00:36:29,160 --> 00:36:31,000 in that situation no it's okay it's Case1028 00:36:31,000 --> 00:36:32,920 by case when it comes in this is why1029 00:36:32,920 --> 00:36:34,800 it's judgmental so I'll give you a1030 00:36:34,800 --> 00:36:36,599 little bit of General in the background1031 00:36:36,599 --> 00:36:37,839 um because we'll look at each case1032 00:36:37,839 --> 00:36:39,280 differently it doesn't mean that they're1033 00:36:39,280 --> 00:36:41,079 limited it just means that when a1034 00:36:41,079 --> 00:36:42,800 general security agreement is taken and1035 00:36:42,800 --> 00:36:44,280 you're going to say like you said you're1036 00:36:44,280 --> 00:36:46,359 West pack and asking for funds they will1037 00:36:46,359 --> 00:36:48,839 email or send a requirement to A and Z1038 00:36:48,839 --> 00:36:50,440 to see hey are you okay if we take1039 00:36:50,440 --> 00:36:52,160 either a a second General Security1040 00:36:52,160 --> 00:36:54,280 agreement or release this asset like1041 00:36:54,280 --> 00:36:56,000 asset Finance generally we get a lot of1042 00:36:56,000 --> 00:36:57,880 that release that asset from what we're1043 00:36:57,880 --> 00:37:00,079 holding in security um and that's just1044 00:37:00,079 --> 00:37:02,319 us reviewing saying hey is that client1045 00:37:02,319 --> 00:37:05,319 taking out a lot of extra debt that we1046 00:37:05,319 --> 00:37:07,800 should probably beware be aware of but1047 00:37:07,800 --> 00:37:10,079 it is judgmental across the board okay1048 00:37:10,079 --> 00:37:12,240 that makes sense so it's it's not like1049 00:37:12,240 --> 00:37:14,280 the permanently stuck it's just about1050 00:37:14,280 --> 00:37:16,280 having the right conversations and yeah1051 00:37:16,280 --> 00:37:18,440 and generally not really required for1052 00:37:18,440 --> 00:37:20,640 your property investors yeah it's for1053 00:37:20,640 --> 00:37:22,720 your trading business portion yeah even1054 00:37:22,720 --> 00:37:24,880 if the property investor is generating1055 00:37:24,880 --> 00:37:27,280 income from a trading business1056 00:37:27,280 --> 00:37:28,480 a lot of the time you're not going to1057 00:37:28,480 --> 00:37:30,599 still do a GSA over it because the1058 00:37:30,599 --> 00:37:32,640 predominant income is the is the rental1059 00:37:32,640 --> 00:37:37,400 income is that right yeah um and if1060 00:37:37,400 --> 00:37:41,280 someone was to want to access Equity1061 00:37:41,280 --> 00:37:44,440 from a commercial property is that from1062 00:37:44,440 --> 00:37:46,160 my experience it hasn't been as1063 00:37:46,160 --> 00:37:47,800 straightforward which I find interesting1064 00:37:47,800 --> 00:37:49,520 because people think oh it's unregulated1065 00:37:49,520 --> 00:37:51,800 lending noncoded whatever it should be1066 00:37:51,800 --> 00:37:53,880 easier but residential lending it seems1067 00:37:53,880 --> 00:37:55,800 to be easier to access cash when you've1068 00:37:55,800 --> 00:37:57,680 got Equity the value's gone up and1069 00:37:57,680 --> 00:37:59,960 you'll Lear to Value ratio lvr is low1070 00:37:59,960 --> 00:38:02,520 you can ask the bank to release say you1071 00:38:02,520 --> 00:38:03,800 know half a million dollars and they'll1072 00:38:03,800 --> 00:38:05,599 give it to you and you can use that for1073 00:38:05,599 --> 00:38:07,760 investment if you have a commercial1074 00:38:07,760 --> 00:38:09,040 property and that's gone up in value1075 00:38:09,040 --> 00:38:11,160 your debt come down and you contact the1076 00:38:11,160 --> 00:38:12,880 bank and say can I have half million1077 00:38:12,880 --> 00:38:15,079 worth of cash where does that half1078 00:38:15,079 --> 00:38:16,560 million come from for residential which1079 00:38:16,560 --> 00:38:19,319 bank does that um look it generally just1080 00:38:19,319 --> 00:38:20,720 asking the question1081 00:38:20,720 --> 00:38:22,920 because it's perceivable sometimes in1082 00:38:22,920 --> 00:38:24,319 the commercial space it's a little bit1083 00:38:24,319 --> 00:38:25,720 riskier it's judgmental in the1084 00:38:25,720 --> 00:38:27,280 background things can change a lot1085 00:38:27,280 --> 00:38:28,960 quicker in like depending on your1086 00:38:28,960 --> 00:38:30,760 industry so it's just understanding1087 00:38:30,760 --> 00:38:32,760 where the money is going towards and you1088 00:38:32,760 --> 00:38:34,560 have to do that for residential as well1089 00:38:34,560 --> 00:38:36,040 you are actually giving the bank where1090 00:38:36,040 --> 00:38:37,720 is that money going what's happening1091 00:38:37,720 --> 00:38:39,839 with it but on Commercial side of it1092 00:38:39,839 --> 00:38:41,040 because it has a little bit of extra1093 00:38:41,040 --> 00:38:42,680 risk sometimes attached we just want to1094 00:38:42,680 --> 00:38:44,160 know hey is it actually got a commercial1095 00:38:44,160 --> 00:38:46,280 purpose to it or is it something you1096 00:38:46,280 --> 00:38:47,520 should be putting through under1097 00:38:47,520 --> 00:38:49,640 residential so you get sometimes the1098 00:38:49,640 --> 00:38:51,040 protection under the consumer credit1099 00:38:51,040 --> 00:38:52,839 code as well it's about understanding1100 00:38:52,839 --> 00:38:54,960 what the money is going towards and1101 00:38:54,960 --> 00:38:56,520 sometimes it might be you've already1102 00:38:56,520 --> 00:38:59,000 spent it so you might have actually1103 00:38:59,000 --> 00:39:01,480 opened up a cafe you've spent 300,000 to1104 00:39:01,480 --> 00:39:03,400 fit out the cafe internally you've been1105 00:39:03,400 --> 00:39:05,480 trading for 2 years then all of a sudden1106 00:39:05,480 --> 00:39:07,520 now the business is trading well and you1107 00:39:07,520 --> 00:39:09,440 want to pull out that extra the equity1108 00:39:09,440 --> 00:39:12,200 you put in up front to open another one1109 00:39:12,200 --> 00:39:13,640 so we might look and say yep we can see1110 00:39:13,640 --> 00:39:14,640 on the balance sheet that you've1111 00:39:14,640 --> 00:39:16,079 actually contributed this much to the1112 00:39:16,079 --> 00:39:17,400 business now that the business is1113 00:39:17,400 --> 00:39:19,240 trading well it's time to release some1114 00:39:19,240 --> 00:39:20,960 of that Equity back because the business1115 00:39:20,960 --> 00:39:22,560 can actually substantiate the debt that1116 00:39:22,560 --> 00:39:24,480 is after and you might use that to open1117 00:39:24,480 --> 00:39:26,119 up your next one so it's about1118 00:39:26,119 --> 00:39:28,040 understanding what the money is for in1119 00:39:28,040 --> 00:39:29,240 the background and it all becomes1120 00:39:29,240 --> 00:39:30,760 judgmental in the background as I kept1121 00:39:30,760 --> 00:39:33,119 mentioning yeah yeah I like that yeah1122 00:39:33,119 --> 00:39:35,000 you will do things like reimbursing like1123 00:39:35,000 --> 00:39:37,119 you mentioned so even with the lease1124 00:39:37,119 --> 00:39:38,480 stock I've done that before where1125 00:39:38,480 --> 00:39:40,319 someone you know they bought a1126 00:39:40,319 --> 00:39:42,079 commercial property cash cuz they had1127 00:39:42,079 --> 00:39:44,520 access to cash at the time it was1128 00:39:44,520 --> 00:39:46,200 through Co and that time commercial1129 00:39:46,200 --> 00:39:48,760 lending kind of stopped temporarily and1130 00:39:48,760 --> 00:39:51,800 then they needed that money back um for1131 00:39:51,800 --> 00:39:53,880 another investment but that commercial1132 00:39:53,880 --> 00:39:55,280 property was paid off so they were able1133 00:39:55,280 --> 00:39:57,000 to then release that money1134 00:39:57,000 --> 00:40:00,440 was $2 million um as a Le stock Aline so1135 00:40:00,440 --> 00:40:01,720 they rent service there and they gave1136 00:40:01,720 --> 00:40:03,800 him 2 million to then use for whatever1137 00:40:03,800 --> 00:40:05,280 they wanted to not necessarily what they1138 00:40:05,280 --> 00:40:06,920 wanted to it was just kind of still had1139 00:40:06,920 --> 00:40:09,800 to prove what it was for however because1140 00:40:09,800 --> 00:40:11,640 they put money in they were able to take1141 00:40:11,640 --> 00:40:14,839 money out essentially mhm yeah yeah yeah1142 00:40:14,839 --> 00:40:18,000 cool um and that overlap was really the1143 00:40:18,000 --> 00:40:20,200 the risk cuz I know with when it comes1144 00:40:20,200 --> 00:40:23,119 to nccp and and non-coded commercial1145 00:40:23,119 --> 00:40:25,880 lending the overlap risk is there so you1146 00:40:25,880 --> 00:40:28,000 need to be clear that there a there's a1147 00:40:28,000 --> 00:40:30,760 clear Line This is Commercial Business1148 00:40:30,760 --> 00:40:33,760 purpose this is consumer uh you know1149 00:40:33,760 --> 00:40:37,440 personal use essentially and if if you I1150 00:40:37,440 --> 00:40:39,319 mean is it is it APPA that is a1151 00:40:39,319 --> 00:40:41,000 regulator if they find out that you're1152 00:40:41,000 --> 00:40:42,800 actually doing consumer lending and1153 00:40:42,800 --> 00:40:44,440 putting under the commercial brand1154 00:40:44,440 --> 00:40:45,880 you're at risk I think it's all under1155 00:40:45,880 --> 00:40:47,640 the spotlight under the spotlight across1156 00:40:47,640 --> 00:40:49,280 and it's gone through a lot of change1157 00:40:49,280 --> 00:40:50,720 over obviously the last couple of years1158 00:40:50,720 --> 00:40:52,480 around it with decision trees around1159 00:40:52,480 --> 00:40:54,200 who's borrowing how much money and I1160 00:40:54,200 --> 00:40:56,160 think it's constantly being reviewed but1161 00:40:56,160 --> 00:40:57,760 yeah it's constantly kind of under the1162 00:40:57,760 --> 00:40:59,520 spotlight making sure that you know if1163 00:40:59,520 --> 00:41:01,119 you're borrowing under your individual1164 00:41:01,119 --> 00:41:02,599 name under the consumer credit code that1165 00:41:02,599 --> 00:41:04,680 you've got that protection for it and I1166 00:41:04,680 --> 00:41:06,640 think you'll find a lot of the major1167 00:41:06,640 --> 00:41:09,440 lenders in the non-consumer credit code1168 00:41:09,440 --> 00:41:11,400 space still have this hate what is the1169 00:41:11,400 --> 00:41:13,160 money going towards it's just prudent1170 00:41:13,160 --> 00:41:15,280 lending and you know as mortgage brokers1171 00:41:15,280 --> 00:41:16,319 yourselves you're asking the same1172 00:41:16,319 --> 00:41:17,560 questions what are the funds going1173 00:41:17,560 --> 00:41:19,520 towards um you don't want to be handing1174 00:41:19,520 --> 00:41:21,040 out money when potentially they can't1175 00:41:21,040 --> 00:41:23,319 afford it in the background but um yeah1176 00:41:23,319 --> 00:41:24,880 it's just prudent1177 00:41:24,880 --> 00:41:26,839 lending yep1178 00:41:26,839 --> 00:41:30,040 um so just one more question before we1179 00:41:30,040 --> 00:41:33,560 we wrap it up uh I think AZ is one of1180 00:41:33,560 --> 00:41:36,920 the only banks that does startup funding1181 00:41:36,920 --> 00:41:38,720 cuz I know I did some startup funding a1182 00:41:38,720 --> 00:41:41,079 few years ago um1183 00:41:41,079 --> 00:41:44,160 where I basically you know I prepared a1184 00:41:44,160 --> 00:41:46,000 business plan and some forecasted1185 00:41:46,000 --> 00:41:47,720 financials with the help of an1186 00:41:47,720 --> 00:41:51,040 accountant and uh because I had property1187 00:41:51,040 --> 00:41:53,839 that was a security so then A and Z was1188 00:41:53,839 --> 00:41:57,240 able to approve the refinance of my1189 00:41:57,240 --> 00:41:59,599 residential property so there was some1190 00:41:59,599 --> 00:42:03,200 consumer lending in there as well as um1191 00:42:03,200 --> 00:42:06,680 an overdraft which I used as startup1192 00:42:06,680 --> 00:42:08,440 capital for my1193 00:42:08,440 --> 00:42:11,680 business if you don't have property A&Z1194 00:42:11,680 --> 00:42:13,640 can still do it but from my1195 00:42:13,640 --> 00:42:16,200 understanding it's maximum 50% so say1196 00:42:16,200 --> 00:42:17,760 you know it's going to cost you 300,0001197 00:42:17,760 --> 00:42:20,599 to buy and fit out of business they'll1198 00:42:20,599 --> 00:42:23,480 need to see you contribute 150,000 which1199 00:42:23,480 --> 00:42:25,040 is your skin in the game and they'll1200 00:42:25,040 --> 00:42:27,559 give you the 150,000 unsecured but it's1201 00:42:27,559 --> 00:42:29,800 not guaranteed just cuz you do a1202 00:42:29,800 --> 00:42:31,240 business plan just cuz you do forecast1203 00:42:31,240 --> 00:42:32,720 it's still got to have some backing in1204 00:42:32,720 --> 00:42:35,040 terms of your history and the industry1205 00:42:35,040 --> 00:42:37,240 and um and how accurate it is like you1206 00:42:37,240 --> 00:42:39,680 can't just say you know you're a I don't1207 00:42:39,680 --> 00:42:43,119 know a cafe and your estimated forecast1208 00:42:43,119 --> 00:42:45,839 a million dollar in the first year like1209 00:42:45,839 --> 00:42:47,720 can you give us a little bit of um yeah1210 00:42:47,720 --> 00:42:49,400 information on that um and I wish I1211 00:42:49,400 --> 00:42:50,559 could say we're the only ones that1212 00:42:50,559 --> 00:42:52,359 actually do the startup side of it but1213 00:42:52,359 --> 00:42:54,280 we we're not we're not the only ones but1214 00:42:54,280 --> 00:42:55,760 we have small business Specialists that1215 00:42:55,760 --> 00:42:58,240 just do 0 to 300,000 which is where1216 00:42:58,240 --> 00:42:59,800 sometimes a lot of that startup sits so1217 00:42:59,800 --> 00:43:01,760 we've got a specialist area that kind of1218 00:43:01,760 --> 00:43:03,720 is Branch based and they're there to1219 00:43:03,720 --> 00:43:05,800 support customers to start up we also1220 00:43:05,800 --> 00:43:07,440 have a lot of information online like1221 00:43:07,440 --> 00:43:09,720 az.com if you go to institutional there1222 00:43:09,720 --> 00:43:11,160 is business plans you can download1223 00:43:11,160 --> 00:43:13,359 There's cashow forecast at any time and1224 00:43:13,359 --> 00:43:15,000 it kind of shows you you know how to do1225 00:43:15,000 --> 00:43:17,000 them and the questions and that you go1226 00:43:17,000 --> 00:43:20,160 through um I like AZ this is why I've1227 00:43:20,160 --> 00:43:22,000 come back and I work at ANZ again is1228 00:43:22,000 --> 00:43:23,920 that um we kind of have that Spectrum1229 00:43:23,920 --> 00:43:26,200 across the whole region small business1230 00:43:26,200 --> 00:43:27,720 help people businesses start up and then1231 00:43:27,720 --> 00:43:29,160 we move into the business bank and they1232 00:43:29,160 --> 00:43:31,480 start growing and then they go into our1233 00:43:31,480 --> 00:43:32,920 corporate area once they get to it1234 00:43:32,920 --> 00:43:34,400 bigger past that I kind of like that we1235 00:43:34,400 --> 00:43:35,720 look after everything across the1236 00:43:35,720 --> 00:43:37,839 Spectrum and and we look after existing1237 00:43:37,839 --> 00:43:39,920 customers as well we look at you know1238 00:43:39,920 --> 00:43:41,119 sometimes the amount of money M through1239 00:43:41,119 --> 00:43:42,359 their accounts which might make it1240 00:43:42,359 --> 00:43:44,160 easier to apply for Lending later on as1241 00:43:44,160 --> 00:43:47,079 well um but when you're coming for1242 00:43:47,079 --> 00:43:48,720 startup funding there isn't a hard and1243 00:43:48,720 --> 00:43:50,400 fast rule I keep saying in the1244 00:43:50,400 --> 00:43:52,839 background judgmental in general like1245 00:43:52,839 --> 00:43:54,040 say if you're wanting to start up a1246 00:43:54,040 --> 00:43:56,720 business and the cost is 300,000 then1247 00:43:56,720 --> 00:43:59,040 yeah we'd like to meet you halfway and I1248 00:43:59,040 --> 00:44:00,640 think that's kind of realistic the fact1249 00:44:00,640 --> 00:44:02,680 that if we're thinking unsecure funding1250 00:44:02,680 --> 00:44:04,960 so we'd like a take on some of the risk1251 00:44:04,960 --> 00:44:06,599 in the background U because you're1252 00:44:06,599 --> 00:44:08,119 starting a new business you're not1253 00:44:08,119 --> 00:44:09,559 purchasing an existing if you're1254 00:44:09,559 --> 00:44:12,119 purchasing an existing business then1255 00:44:12,119 --> 00:44:14,040 it's already earning income so you know1256 00:44:14,040 --> 00:44:15,920 there's some validity in terms of the1257 00:44:15,920 --> 00:44:17,839 amount of money that business is making1258 00:44:17,839 --> 00:44:19,720 but if it's a full startup then yeah we1259 00:44:19,720 --> 00:44:21,000 we'd rather meet halfway if you're1260 00:44:21,000 --> 00:44:23,200 thinking unsecure um but that is in1261 00:44:23,200 --> 00:44:24,720 general each deals looked at1262 00:44:24,720 --> 00:44:26,680 individually uh if you got property to1263 00:44:26,680 --> 00:44:28,640 support like you've done yourself then1264 00:44:28,640 --> 00:44:30,119 you we can go that a little bit higher1265 00:44:30,119 --> 00:44:31,880 or we'll consider a little bit higher in1266 00:44:31,880 --> 00:44:34,400 the background but what plays a big part1267 00:44:34,400 --> 00:44:37,520 is you know the four sees of credit Y1268 00:44:37,520 --> 00:44:39,040 what character do you have have you been1269 00:44:39,040 --> 00:44:41,760 in the industry it's I've had one when I1270 00:44:41,760 --> 00:44:43,559 was a broker before where someone comes1271 00:44:43,559 --> 00:44:45,640 oh I'd like to buy a clothing business1272 00:44:45,640 --> 00:44:47,440 oh well have you worked in the industry1273 00:44:47,440 --> 00:44:48,720 oh no I just love1274 00:44:48,720 --> 00:44:51,760 clothes it's like okay well you know do1275 00:44:51,760 --> 00:44:53,640 you understand work cover do you1276 00:44:53,640 --> 00:44:56,440 understand super wages roster ing so1277 00:44:56,440 --> 00:44:57,559 there's a lot of things that go into1278 00:44:57,559 --> 00:44:59,520 running a business so if you're starting1279 00:44:59,520 --> 00:45:01,520 up a new business A business plan is1280 00:45:01,520 --> 00:45:02,839 going to show us what industry1281 00:45:02,839 --> 00:45:05,079 experience you've had um do you know1282 00:45:05,079 --> 00:45:07,000 have you worked in there as well do you1283 00:45:07,000 --> 00:45:07,839 understand the business you're looking1284 00:45:07,839 --> 00:45:10,040 at buying or how a runner and then a1285 00:45:10,040 --> 00:45:12,319 cashow forecast yes we can put numbers1286 00:45:12,319 --> 00:45:13,839 on a page and I think it's rare that I1287 00:45:13,839 --> 00:45:15,240 see a cashow forecast that doesn't1288 00:45:15,240 --> 00:45:17,760 service the debt um but what happens is1289 00:45:17,760 --> 00:45:19,480 how did you come up with those numbers1290 00:45:19,480 --> 00:45:20,640 like oh my turnover is going to be1291 00:45:20,640 --> 00:45:22,599 10,000 a month okay well how you expect1292 00:45:22,599 --> 00:45:25,040 to achieve that so A Cafe might be okay1293 00:45:25,040 --> 00:45:26,440 we're going to turn the table was over1294 00:45:26,440 --> 00:45:28,160 you know two or three times in one night1295 00:45:28,160 --> 00:45:30,599 average spend per thing will be $36 per1296 00:45:30,599 --> 00:45:32,920 client when they come in so it's kind of1297 00:45:32,920 --> 00:45:34,880 validating the what you're giving us in1298 00:45:34,880 --> 00:45:36,480 terms of the C forecaster and how much1299 00:45:36,480 --> 00:45:38,599 you're going to earn yes we do look at a1300 00:45:38,599 --> 00:45:40,599 little bit more for those new startups1301 00:45:40,599 --> 00:45:42,599 we will look at it in depth if you're1302 00:45:42,599 --> 00:45:44,440 thinking unsecured funding that you're1303 00:45:44,440 --> 00:45:45,960 requesting in the background we'll have1304 00:45:45,960 --> 00:45:47,440 a look and see what is your character1305 00:45:47,440 --> 00:45:48,839 what's the contribution you're putting1306 00:45:48,839 --> 00:45:51,480 in um you know capacity to service the1307 00:45:51,480 --> 00:45:53,040 debt in the background we might limit1308 00:45:53,040 --> 00:45:55,359 the loan term so we might shorten it to1309 00:45:55,359 --> 00:45:57,040 reduce the risk so that you pay it off a1310 00:45:57,040 --> 00:45:58,520 little bit quicker but we'll work with1311 00:45:58,520 --> 00:45:59,880 you this is where the judgmental part of1312 00:45:59,880 --> 00:46:01,599 it but we do look at startups I mean1313 00:46:01,599 --> 00:46:03,720 everyone's got to start somewhere um but1314 00:46:03,720 --> 00:46:06,960 there's just no set policy about the 50%1315 00:46:06,960 --> 00:46:09,000 side of it but we'd rather meet halfway1316 00:46:09,000 --> 00:46:10,960 that would probably be a starting point1317 00:46:10,960 --> 00:46:12,720 yeah yeah and just to put some context1318 00:46:12,720 --> 00:46:14,920 when I did apply for I wasn't new to1319 00:46:14,920 --> 00:46:16,520 Industry I'd been in the lending1320 00:46:16,520 --> 00:46:17,880 industry and I'd been a broker working1321 00:46:17,880 --> 00:46:20,400 for other companies before so when they1322 00:46:20,400 --> 00:46:22,240 approved it they w't off we approved it1323 00:46:22,240 --> 00:46:25,160 right you didn't yes yeah yeah if you1324 00:46:25,160 --> 00:46:27,640 didn't I probably have you on the show1325 00:46:27,640 --> 00:46:31,240 now so yeah it did it did help me um to1326 00:46:31,240 --> 00:46:33,040 learn a lesson that I at the time I1327 00:46:33,040 --> 00:46:35,359 wasn't ready for business cuz I used1328 00:46:35,359 --> 00:46:36,880 that overdraft very quickly and I didn't1329 00:46:36,880 --> 00:46:38,920 have enough clients to back it up um so1330 00:46:38,920 --> 00:46:40,599 I had had to sell that property to clear1331 00:46:40,599 --> 00:46:42,880 that debt uh and I reset which was1332 00:46:42,880 --> 00:46:44,119 actually really good for me cuz I ended1333 00:46:44,119 --> 00:46:45,720 up working for another broker I stayed1334 00:46:45,720 --> 00:46:47,960 there for close to 5 years and I learned1335 00:46:47,960 --> 00:46:51,319 a lot um and that's why G I've gone out1336 00:46:51,319 --> 00:46:53,319 for a second attempt and so far so good1337 00:46:53,319 --> 00:46:54,640 but you might be buying like a a1338 00:46:54,640 --> 00:46:56,839 franchise like I say way then all of a1339 00:46:56,839 --> 00:46:59,079 sudden we actually have an some sort of1340 00:46:59,079 --> 00:47:00,960 agreement with the master franchise or1341 00:47:00,960 --> 00:47:03,040 sometimes where we will lend up to 65%1342 00:47:03,040 --> 00:47:04,520 to buy into that so sometimes the1343 00:47:04,520 --> 00:47:06,000 judgmental part will Lear a little bit1344 00:47:06,000 --> 00:47:08,160 more as well so it's just about reaching1345 00:47:08,160 --> 00:47:09,359 out and giving an idea of what you're1346 00:47:09,359 --> 00:47:11,200 looking at doing yeah that makes sense1347 00:47:11,200 --> 00:47:13,160 because if it's ultimate a business is1348 00:47:13,160 --> 00:47:16,280 as good as its um systems processes and1349 00:47:16,280 --> 00:47:18,280 uh and the people so if you're if you're1350 00:47:18,280 --> 00:47:19,960 buying into an established brand that1351 00:47:19,960 --> 00:47:22,920 already has um customer attraction or1352 00:47:22,920 --> 00:47:25,400 customer base and then also it's got its1353 00:47:25,400 --> 00:47:27,599 system that you can follow then it1354 00:47:27,599 --> 00:47:29,040 really just comes down to the character1355 00:47:29,040 --> 00:47:31,800 of you and your ability to follow those1356 00:47:31,800 --> 00:47:33,800 systems and have a you know good1357 00:47:33,800 --> 00:47:36,319 character when it comes to um your1358 00:47:36,319 --> 00:47:39,200 credit history as well right you said1359 00:47:39,200 --> 00:47:42,720 the four C's so collat capacity uh1360 00:47:42,720 --> 00:47:45,599 character collateral so the security put1361 00:47:45,599 --> 00:47:47,319 what was the last one contribution and1362 00:47:47,319 --> 00:47:48,960 contribution yeah yeah so what are you1363 00:47:48,960 --> 00:47:50,359 actually putting in skin in the game1364 00:47:50,359 --> 00:47:52,680 they call it yeah a lot of people they1365 00:47:52,680 --> 00:47:54,400 want to you1366 00:47:54,400 --> 00:47:57,680 know put no money in can use other1367 00:47:57,680 --> 00:48:00,280 people's money and that's fair enough uh1368 00:48:00,280 --> 00:48:01,559 it's very common in the property1369 00:48:01,559 --> 00:48:04,200 development space um but that's just1370 00:48:04,200 --> 00:48:05,760 yeah a lot more moving Parts I haven't1371 00:48:05,760 --> 00:48:07,400 touched on on property development and I1372 00:48:07,400 --> 00:48:10,280 probably won't in this episode um but1373 00:48:10,280 --> 00:48:11,920 look I want to thank you for coming1374 00:48:11,920 --> 00:48:14,200 today on the show you've been very um1375 00:48:14,200 --> 00:48:16,040 insightful in terms of U what you've1376 00:48:16,040 --> 00:48:18,720 shared today and uh you know for1377 00:48:18,720 --> 00:48:20,640 customers out there or future customers1378 00:48:20,640 --> 00:48:24,000 that want to learn more about what azed1379 00:48:24,000 --> 00:48:26,200 does do in this commercial space before1380 00:48:26,200 --> 00:48:28,800 they book a call with me because um I1381 00:48:28,800 --> 00:48:30,480 think it's important to be you know1382 00:48:30,480 --> 00:48:32,400 informed and prepared so that we're1383 00:48:32,400 --> 00:48:33,800 having a bit more sophisticated1384 00:48:33,800 --> 00:48:36,160 conversations um where can they find1385 00:48:36,160 --> 00:48:38,079 that you mentioned earlier az.com there1386 00:48:38,079 --> 00:48:40,400 was some other yeah if you go to az.com1387 00:48:40,400 --> 00:48:41,920 if you obviously just go to the tabs at1388 00:48:41,920 --> 00:48:43,640 the top under business it will tell you1389 00:48:43,640 --> 00:48:44,920 the different products that we offer in1390 00:48:44,920 --> 00:48:46,880 the background um but then if you go on1391 00:48:46,880 --> 00:48:49,000 institutional as well then it obviously1392 00:48:49,000 --> 00:48:51,559 gives you sometimes industry insights so1393 00:48:51,559 --> 00:48:53,079 insights around different Industries as1394 00:48:53,079 --> 00:48:54,960 well we bring out a papers every 31395 00:48:54,960 --> 00:48:57,040 months on that but also you can download1396 00:48:57,040 --> 00:48:59,880 helpful guides like uh business plans1397 00:48:59,880 --> 00:49:03,280 CASRO forecasts starting up trading so1398 00:49:03,280 --> 00:49:04,680 kind of gives you a lot of online1399 00:49:04,680 --> 00:49:07,359 content um if your starting or even1400 00:49:07,359 --> 00:49:09,280 existing trading of how we might be able1401 00:49:09,280 --> 00:49:11,920 to support as well awesome and if there1402 00:49:11,920 --> 00:49:14,040 are any Brokers uh residential Brokers1403 00:49:14,040 --> 00:49:16,200 that do listen to my podcast and they1404 00:49:16,200 --> 00:49:18,280 want to you know tap into the commercial1405 00:49:18,280 --> 00:49:20,520 space I recommend getting in touch with1406 00:49:20,520 --> 00:49:23,799 Lee uh they can find you on on LinkedIn1407 00:49:23,799 --> 00:49:25,680 uh but you do look after the Victoria1408 00:49:25,680 --> 00:49:28,599 and Tasmania region more so right um but1409 00:49:28,599 --> 00:49:30,079 even then I'm sure if they contacted you1410 00:49:30,079 --> 00:49:31,720 you can re you know connect them to the1411 00:49:31,720 --> 00:49:33,040 right person for their particular1412 00:49:33,040 --> 00:49:34,839 aggregator group as well sometimes I'm1413 00:49:34,839 --> 00:49:36,640 just the conduit to help connect you1414 00:49:36,640 --> 00:49:38,920 with the right people because you know1415 00:49:38,920 --> 00:49:40,480 like I said resi you do all the research1416 00:49:40,480 --> 00:49:42,480 commercial a lot of it isn't online so1417 00:49:42,480 --> 00:49:44,319 you just need to know who to call as1418 00:49:44,319 --> 00:49:45,799 long as you know who to call I don't1419 00:49:45,799 --> 00:49:48,079 expect you to remember the franchise1420 00:49:48,079 --> 00:49:50,640 lvrs the property the types of security1421 00:49:50,640 --> 00:49:51,680 you don't need to remember it that's1422 00:49:51,680 --> 00:49:53,040 what the bankers are there for an1423 00:49:53,040 --> 00:49:54,440 appetite will change everything we1424 00:49:54,440 --> 00:49:56,440 talked about today in 6 month's time1425 00:49:56,440 --> 00:49:58,799 might be different so this is where the1426 00:49:58,799 --> 00:50:00,839 bankers are there to help so they'll1427 00:50:00,839 --> 00:50:01,960 understand the appetite so you just need1428 00:50:01,960 --> 00:50:03,839 to know who to call yep well I've got1429 00:50:03,839 --> 00:50:06,119 you so I'll call you every time and in 61430 00:50:06,119 --> 00:50:07,760 months time I might have to back on in1431 00:50:07,760 --> 00:50:09,160 case appetite1432 00:50:09,160 --> 00:50:11,880 changes but yeah uh awesome well thanks1433 00:50:11,880 --> 00:50:13,960 everyone for for listening today uh if1434 00:50:13,960 --> 00:50:16,839 you do uh enjoy it uh please share it on1435 00:50:16,839 --> 00:50:18,599 your socials please follow us and1436 00:50:18,599 --> 00:50:20,680 subscribe and uh I'll see you on the1437 00:50:20,680 --> 00:50:24,440 next episode thanks again Le thank1438 00:50:24,440 --> 00:50:27,440 you1439 00:50:28,380 --> 00:50:42,800 [Music]1440 00:50:44,760 --> 00:50:47,760 a