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 know 3 00:00:08,000 --> 00:00:10,519 the four sees of credit yeah what 4 00:00:10,519 --> 00:00:12,000 character do you have have you been in 5 00:00:12,000 --> 00:00:14,639 the industry it's I've had one when I 6 00:00:14,639 --> 00:00:16,400 was a broker before where someone come 7 00:00:16,400 --> 00:00:18,480 oh I'd like to buy a clothing business 8 00:00:18,480 --> 00:00:20,279 oh well have you worked in the industry 9 00:00:20,279 --> 00:00:21,600 oh no I just love 10 00:00:21,600 --> 00:00:24,599 clothes it's like okay well you know do 11 00:00:24,599 --> 00:00:26,439 you understand work cover do you 12 00:00:26,439 --> 00:00:29,240 understand super wages rostering so 13 00:00:29,240 --> 00:00:30,359 there's a lot of things that go into 14 00:00:30,359 --> 00:00:32,320 running a business so if you're starting 15 00:00:32,320 --> 00:00:34,280 up a new business A business plan is 16 00:00:34,280 --> 00:00:35,640 going to show us what industry 17 00:00:35,640 --> 00:00:37,960 experience you've had um do you know 18 00:00:37,960 --> 00:00:39,800 have you worked in there as well do you 19 00:00:39,800 --> 00:00:40,640 understand the business you're looking 20 00:00:40,640 --> 00:00:42,840 at buying or how a runner and then a 21 00:00:42,840 --> 00:00:45,200 cash forecast yes we can put numbers on 22 00:00:45,200 --> 00:00:46,800 a page and I think it's rare that I see 23 00:00:46,800 --> 00:00:48,640 a cash forecast that doesn't service the 24 00:00:48,640 --> 00:00:50,879 debt um but what happens is how did you 25 00:00:50,879 --> 00:00:52,840 come up with those numbers welcome to 26 00:00:52,840 --> 00:00:54,879 the debt to Financial Freedom podcast 27 00:00:54,879 --> 00:00:56,680 I'm your host Victor Lagos and the 28 00:00:56,680 --> 00:00:59,120 founder of Lagos Financial I've been in 29 00:00:59,120 --> 00:01:01,320 the finance and lending industry for 16 30 00:01:01,320 --> 00:01:03,480 years and I've personally made Financial 31 00:01:03,480 --> 00:01:06,119 mistakes and learned from them I started 32 00:01:06,119 --> 00:01:07,960 this podcast to share stories and 33 00:01:07,960 --> 00:01:10,280 lessons on my own journey and to share 34 00:01:10,280 --> 00:01:12,360 insights that may help others on their 35 00:01:12,360 --> 00:01:14,799 journey and I interview people that I've 36 00:01:14,799 --> 00:01:16,680 connected with that share the same 37 00:01:16,680 --> 00:01:18,759 values and Mission to help others create 38 00:01:18,759 --> 00:01:21,159 Financial Freedom my goal with this 39 00:01:21,159 --> 00:01:24,119 podcast is to share raw honest 40 00:01:24,119 --> 00:01:26,280 transparent and helpful stories that you 41 00:01:26,280 --> 00:01:28,759 can relate to and inspires you to take 42 00:01:28,759 --> 00:01:30,400 control of your finances 43 00:01:30,400 --> 00:01:32,200 and only have debt that brings you 44 00:01:32,200 --> 00:01:35,200 closer to Financial 45 00:01:35,240 --> 00:01:37,880 Freedom welcome to the debt to Financial 46 00:01:37,880 --> 00:01:40,759 Freedom podcast I am your host Victor 47 00:01:40,759 --> 00:01:44,119 Lagos I am also the founder of the 48 00:01:44,119 --> 00:01:46,119 commercial and residential Finance 49 00:01:46,119 --> 00:01:48,159 brokerage called Lagos 50 00:01:48,159 --> 00:01:52,040 Financial so today I've got a uh 51 00:01:52,040 --> 00:01:55,680 interesting guest someone who's uh been 52 00:01:55,680 --> 00:01:58,840 in the commercial lending industry for 53 00:01:58,840 --> 00:02:01,280 about 25 years now yes how quickly it 54 00:02:01,280 --> 00:02:03,360 goes past the fact that when you said oh 55 00:02:03,360 --> 00:02:05,600 you started in 1998 that yeah the 56 00:02:05,600 --> 00:02:07,560 numbers roll on pretty quick but when 57 00:02:07,560 --> 00:02:09,959 you love what you do time just 58 00:02:09,959 --> 00:02:12,280 flies yeah I mean I was looking at your 59 00:02:12,280 --> 00:02:13,840 LinkedIn profile and it said that you're 60 00:02:13,840 --> 00:02:17,959 working uh in ing in 61 00:02:17,959 --> 00:02:20,080 1998 yes it was a long time ago it's 62 00:02:20,080 --> 00:02:21,720 when they first started introducing 63 00:02:21,720 --> 00:02:23,959 loans from Brokers yeah we had to 64 00:02:23,959 --> 00:02:25,920 manually check each one to make sure of 65 00:02:25,920 --> 00:02:28,000 the quality of them coming in and then 66 00:02:28,000 --> 00:02:30,040 from there it just snowballed yeah 67 00:02:30,040 --> 00:02:32,560 because back then it commercial broking 68 00:02:32,560 --> 00:02:34,000 wasn't really a thing right it was just 69 00:02:34,000 --> 00:02:35,680 mainly residential or were you doing 70 00:02:35,680 --> 00:02:37,519 commercial stuff back then as well uh 71 00:02:37,519 --> 00:02:38,640 well that was when they first started 72 00:02:38,640 --> 00:02:41,000 across the residential space um in 73 00:02:41,000 --> 00:02:42,360 hadn't actually pushed into commercial 74 00:02:42,360 --> 00:02:43,879 yet so I was just working in purely 75 00:02:43,879 --> 00:02:46,879 residential then okay and you started uh 76 00:02:46,879 --> 00:02:51,280 at A&Z in what 2005 or something like 77 00:02:51,280 --> 00:02:53,159 that or not long after that where I just 78 00:02:53,159 --> 00:02:55,519 went straight into commercial yeah so 79 00:02:55,519 --> 00:02:57,959 yeah well look this is why I've got you 80 00:02:57,959 --> 00:02:59,760 on the show today because a lot of my 81 00:02:59,760 --> 00:03:02,440 listeners are a firsttime uh commercial 82 00:03:02,440 --> 00:03:05,000 investors they've got a residential 83 00:03:05,000 --> 00:03:07,319 portfolio or they don't have a 84 00:03:07,319 --> 00:03:08,879 residential portfolio and they just they 85 00:03:08,879 --> 00:03:11,120 realize commercial is a good asset 86 00:03:11,120 --> 00:03:13,440 because it's um you know it's all about 87 00:03:13,440 --> 00:03:15,239 passive income you know Financial 88 00:03:15,239 --> 00:03:17,000 Freedom is creating multiple streams of 89 00:03:17,000 --> 00:03:20,239 income and commercial property seems 90 00:03:20,239 --> 00:03:22,599 like the clear winner but the The 91 00:03:22,599 --> 00:03:25,400 Lending industry sorry Landing landscape 92 00:03:25,400 --> 00:03:27,680 is very different to residential so I 93 00:03:27,680 --> 00:03:29,840 wanted to ask you some questions from 94 00:03:29,840 --> 00:03:31,519 your angle from your perspective I guess 95 00:03:31,519 --> 00:03:34,120 I'm representing the bank because a lot 96 00:03:34,120 --> 00:03:35,680 of people don't you know when they want 97 00:03:35,680 --> 00:03:37,760 to research and how does commercial 98 00:03:37,760 --> 00:03:39,360 lending work what are the interest rates 99 00:03:39,360 --> 00:03:42,159 what are the fees um you can't find that 100 00:03:42,159 --> 00:03:44,280 stuff it's not readily available online 101 00:03:44,280 --> 00:03:46,760 why is it well residential generally is 102 00:03:46,760 --> 00:03:48,400 a little bit more policy based you're 103 00:03:48,400 --> 00:03:50,519 find like you earn income you've got 104 00:03:50,519 --> 00:03:52,920 security and kind of get yes or no when 105 00:03:52,920 --> 00:03:55,120 you start moving across to commercial it 106 00:03:55,120 --> 00:03:57,040 becomes very much judgmental so 107 00:03:57,040 --> 00:03:58,599 depending on the type of security you're 108 00:03:58,599 --> 00:04:00,560 buying the tenant you might have in 109 00:04:00,560 --> 00:04:02,519 there maybe you're going to be occupying 110 00:04:02,519 --> 00:04:04,040 it yourself so there's a lot of 111 00:04:04,040 --> 00:04:06,799 different VAR variables that go into it 112 00:04:06,799 --> 00:04:08,680 and where it becomes judgmental in the 113 00:04:08,680 --> 00:04:10,879 background um so then obviously the 114 00:04:10,879 --> 00:04:13,079 policies s of different differentiates 115 00:04:13,079 --> 00:04:14,920 where you go retail policy and then 116 00:04:14,920 --> 00:04:16,440 you've got wholesale so it's a two 117 00:04:16,440 --> 00:04:17,839 different credit policies and one 118 00:04:17,839 --> 00:04:20,358 obviously comes under nccp so National 119 00:04:20,358 --> 00:04:22,440 Consumer Credit code for the residential 120 00:04:22,440 --> 00:04:24,120 and when you go into wholesale so the 121 00:04:24,120 --> 00:04:25,840 commercial side then yeah it's 122 00:04:25,840 --> 00:04:27,560 judgmental it doesn't it's not so strict 123 00:04:27,560 --> 00:04:29,440 in the background yeah that makes a lot 124 00:04:29,440 --> 00:04:31,960 of sense and that's where I've really 125 00:04:31,960 --> 00:04:34,600 come in into the industry the commercial 126 00:04:34,600 --> 00:04:36,440 side the last couple of years and my 127 00:04:36,440 --> 00:04:39,080 first commercial deal was actually with 128 00:04:39,080 --> 00:04:41,960 Az um so that was two and a bit years 129 00:04:41,960 --> 00:04:45,759 ago um the client is still on a fixed 130 00:04:45,759 --> 00:04:47,800 rate for another 12 months I got him a 131 00:04:47,800 --> 00:04:51,280 3year fixed rate interest only 132 00:04:51,280 --> 00:04:54,759 2.49% yeah and loan term is 30 years and 133 00:04:54,759 --> 00:04:57,120 that's very uncommon in the commercial 134 00:04:57,120 --> 00:05:00,199 lending uh space what I found with other 135 00:05:00,199 --> 00:05:03,000 Banks especially the big four they 136 00:05:03,000 --> 00:05:05,280 typically offer a short-term you know 137 00:05:05,280 --> 00:05:07,840 loan such as you know 2 years or 3 years 138 00:05:07,840 --> 00:05:10,120 Max and then after that they roll the 139 00:05:10,120 --> 00:05:11,840 loan over there might be an annual 140 00:05:11,840 --> 00:05:14,400 review in between uh another valuation 141 00:05:14,400 --> 00:05:16,240 after say 3 years and the customer has 142 00:05:16,240 --> 00:05:18,479 to pay for that and then they you know 143 00:05:18,479 --> 00:05:20,360 give them another 3 years but obviously 144 00:05:20,360 --> 00:05:21,800 you can't expect someone to pay the loan 145 00:05:21,800 --> 00:05:23,759 back in 3 years so it's usually interest 146 00:05:23,759 --> 00:05:26,800 only what sets AZ apart because it seems 147 00:05:26,800 --> 00:05:28,360 like you know you guys are doing 30 148 00:05:28,360 --> 00:05:30,160 years you know is that was that 149 00:05:30,160 --> 00:05:31,840 deliberate is that something you know 150 00:05:31,840 --> 00:05:33,400 I'll take a quick step only your first 151 00:05:33,400 --> 00:05:34,880 commercial Loan 2 years ago so you're 152 00:05:34,880 --> 00:05:37,880 still you know getting into it so 20 25 153 00:05:37,880 --> 00:05:41,280 years in um you'll find obviously yeah 154 00:05:41,280 --> 00:05:43,319 you can vary depending on CU there is 155 00:05:43,319 --> 00:05:45,600 options with from the homelan side of it 156 00:05:45,600 --> 00:05:47,080 generally you're buying a property you 157 00:05:47,080 --> 00:05:48,639 pay it off if it's investment you might 158 00:05:48,639 --> 00:05:50,479 do interest only when you start going 159 00:05:50,479 --> 00:05:52,800 commercial there's different types of 160 00:05:52,800 --> 00:05:55,080 products and variables that go into it 161 00:05:55,080 --> 00:05:56,680 see you might be looking at just a 162 00:05:56,680 --> 00:05:58,680 standard 30-year loan term obviously 163 00:05:58,680 --> 00:06:00,080 about a year ago lot of the industry 164 00:06:00,080 --> 00:06:01,720 moved to a 30-year loan term in the 165 00:06:01,720 --> 00:06:04,240 small business space um then obviously 166 00:06:04,240 --> 00:06:05,919 it's a more of a set and forget for your 167 00:06:05,919 --> 00:06:07,759 investment side of it but if you've 168 00:06:07,759 --> 00:06:09,280 actually just got it as a lease so 169 00:06:09,280 --> 00:06:12,240 rented what we do is another policy is 170 00:06:12,240 --> 00:06:14,199 just using the rent and that's how we 171 00:06:14,199 --> 00:06:15,960 determine how much you can borrow and if 172 00:06:15,960 --> 00:06:17,599 we're just using the rent if you're on a 173 00:06:17,599 --> 00:06:20,080 5year lease then your term will be 5 174 00:06:20,080 --> 00:06:22,639 years and after that 5 years we look to 175 00:06:22,639 --> 00:06:24,960 see has that tenant taken on the next 176 00:06:24,960 --> 00:06:26,840 round of lease so another 5 years after 177 00:06:26,840 --> 00:06:28,919 that and then we do another 5year term 178 00:06:28,919 --> 00:06:30,599 off the back of that cuz if that's the 179 00:06:30,599 --> 00:06:32,680 only income we're using to assess a 180 00:06:32,680 --> 00:06:34,919 commercial loan then what happens if 181 00:06:34,919 --> 00:06:37,280 that tenant kind of leaves so it's just 182 00:06:37,280 --> 00:06:38,720 kind of making sure that say if we're 183 00:06:38,720 --> 00:06:41,199 using extra income from your trading 184 00:06:41,199 --> 00:06:44,720 business or your ongoing job then maybe 185 00:06:44,720 --> 00:06:46,680 we can look at a 30 year term instead so 186 00:06:46,680 --> 00:06:48,120 that is more of a set and forget because 187 00:06:48,120 --> 00:06:49,919 they're not just relying on the rental 188 00:06:49,919 --> 00:06:52,319 income that that property's getting yeah 189 00:06:52,319 --> 00:06:54,080 yeah that makes sense and Le stock has 190 00:06:54,080 --> 00:06:56,680 been around for quite some time this is 191 00:06:56,680 --> 00:06:58,840 a product that I've been using quite a 192 00:06:58,840 --> 00:07:01,000 lot and um it's it's quite a good 193 00:07:01,000 --> 00:07:02,599 product for people that have reached 194 00:07:02,599 --> 00:07:04,720 their borrowing capacity limits for 195 00:07:04,720 --> 00:07:07,680 their residential portfolio because the 196 00:07:07,680 --> 00:07:10,360 rental return is so much stronger the 197 00:07:10,360 --> 00:07:12,680 bank um there's a few Banks out there 198 00:07:12,680 --> 00:07:15,800 now a andz can do a loan according to 199 00:07:15,800 --> 00:07:18,479 the lease only so even though you're the 200 00:07:18,479 --> 00:07:20,080 say the borrower the 201 00:07:20,080 --> 00:07:24,000 guarantor um you're not necessarily 202 00:07:24,000 --> 00:07:26,080 needing your income to service the debt 203 00:07:26,080 --> 00:07:28,080 but your profile is still important you 204 00:07:28,080 --> 00:07:29,879 still need to be someone that has got 205 00:07:29,879 --> 00:07:31,759 you know decent amount of assets to your 206 00:07:31,759 --> 00:07:33,759 name you know you don't have any you 207 00:07:33,759 --> 00:07:35,440 know credit impairments on your file and 208 00:07:35,440 --> 00:07:37,919 things like that but it is relatively 209 00:07:37,919 --> 00:07:39,639 low touch when it comes to the 210 00:07:39,639 --> 00:07:41,400 individuals behind it it's really on the 211 00:07:41,400 --> 00:07:43,599 tenant and the lease and the and the 212 00:07:43,599 --> 00:07:45,639 property itself right this is where your 213 00:07:45,639 --> 00:07:47,680 experience comes into it and this is 214 00:07:47,680 --> 00:07:49,680 where the mortgage broken industry gives 215 00:07:49,680 --> 00:07:52,319 advice because you probably as you've 216 00:07:52,319 --> 00:07:53,800 seen a lot of the banks don't put 217 00:07:53,800 --> 00:07:55,599 policies and stuff online because it is 218 00:07:55,599 --> 00:07:57,639 all judgmental credit on the commercial 219 00:07:57,639 --> 00:07:59,639 side and this is where the advice you 220 00:07:59,639 --> 00:08:02,080 give around what banks can do what um 221 00:08:02,080 --> 00:08:03,840 you can start deciding is it more of the 222 00:08:03,840 --> 00:08:05,039 lease stock were you just using the 223 00:08:05,039 --> 00:08:07,159 rental income or are we using other 224 00:08:07,159 --> 00:08:09,639 income for a longer loan term because 225 00:08:09,639 --> 00:08:11,720 it's it be harder for you know a client 226 00:08:11,720 --> 00:08:12,960 out there to do their own research for 227 00:08:12,960 --> 00:08:15,919 it yeah y one thing you touched on 228 00:08:15,919 --> 00:08:18,560 earlier and I was going to ask you about 229 00:08:18,560 --> 00:08:19,240 uh 230 00:08:19,240 --> 00:08:22,840 nccp and or coded lending and then 231 00:08:22,840 --> 00:08:26,800 non-coded or unregulated lending so the 232 00:08:26,800 --> 00:08:28,960 birth of nccp National Consumer Credit 233 00:08:28,960 --> 00:08:32,000 protection was after the GFC Global 234 00:08:32,000 --> 00:08:35,120 financial crisis and to my knowledge cuz 235 00:08:35,120 --> 00:08:38,279 I I got in the industry in 2006 um so 236 00:08:38,279 --> 00:08:40,760 it's right at that time um to my 237 00:08:40,760 --> 00:08:43,080 knowledge it was a lot to do with uh 238 00:08:43,080 --> 00:08:45,519 borrowers basically going to the courts 239 00:08:45,519 --> 00:08:46,680 and saying the bank shouldn't have lent 240 00:08:46,680 --> 00:08:50,000 me the money um and they won so then 241 00:08:50,000 --> 00:08:52,279 they introduced these um regulations to 242 00:08:52,279 --> 00:08:54,760 protect the consumer so what happened 243 00:08:54,760 --> 00:08:57,600 then there was a split right between 244 00:08:57,600 --> 00:08:59,760 consumer retail 245 00:08:59,760 --> 00:09:02,399 um customers which includes residential 246 00:09:02,399 --> 00:09:04,839 lending for own occupied or investment 247 00:09:04,839 --> 00:09:07,480 purposes as well as personal loans car 248 00:09:07,480 --> 00:09:09,160 loans credit cards all of that falls 249 00:09:09,160 --> 00:09:11,839 under consumer if it's an individual 250 00:09:11,839 --> 00:09:13,440 most of the time they have personal use 251 00:09:13,440 --> 00:09:15,839 behind it and then and then unregulated 252 00:09:15,839 --> 00:09:18,240 or non-coded lending is when it's a 253 00:09:18,240 --> 00:09:20,959 business mhm right um but it doesn't 254 00:09:20,959 --> 00:09:23,600 necessarily mean that it has to be a 255 00:09:23,600 --> 00:09:27,079 business that's um operating it can be a 256 00:09:27,079 --> 00:09:30,320 special purpose vehicle be that be it 257 00:09:30,320 --> 00:09:33,480 like a a company or a trust that owns 258 00:09:33,480 --> 00:09:37,600 and holds the asset but the individuals 259 00:09:37,600 --> 00:09:39,079 don't have a business they don't have a 260 00:09:39,079 --> 00:09:40,880 trading business generate you know any 261 00:09:40,880 --> 00:09:42,640 income from a self-employed entity it's 262 00:09:42,640 --> 00:09:43,600 just 263 00:09:43,600 --> 00:09:46,360 py but that still puts it into the 264 00:09:46,360 --> 00:09:50,200 non-coded or the non-regulated so from 265 00:09:50,200 --> 00:09:51,360 the bank's 266 00:09:51,360 --> 00:09:54,920 perspective how do they treat customers 267 00:09:54,920 --> 00:09:58,000 differently because of this split h no 268 00:09:58,000 --> 00:09:59,880 it's a good question and we do we do 269 00:09:59,880 --> 00:10:01,519 treat them differently because when 270 00:10:01,519 --> 00:10:03,560 you're coming under the consumer credit 271 00:10:03,560 --> 00:10:05,000 code just buying a home loan or 272 00:10:05,000 --> 00:10:06,880 investment it is generally just a set 273 00:10:06,880 --> 00:10:09,320 and forget there's not much maintenance 274 00:10:09,320 --> 00:10:11,560 required um there's just the call center 275 00:10:11,560 --> 00:10:12,959 teams if you need to change direct 276 00:10:12,959 --> 00:10:14,640 debits so the ongoing requirements they 277 00:10:14,640 --> 00:10:16,640 generally a lot less but when you start 278 00:10:16,640 --> 00:10:18,399 going into the commercial space 279 00:10:18,399 --> 00:10:20,320 generally um a little bit more touch 280 00:10:20,320 --> 00:10:22,720 points come across cuz there might be a 281 00:10:22,720 --> 00:10:24,279 trading business in the background that 282 00:10:24,279 --> 00:10:26,800 might need fos machines trading accounts 283 00:10:26,800 --> 00:10:29,120 in the background as well or say if you 284 00:10:29,120 --> 00:10:30,720 are just a property investor and you've 285 00:10:30,720 --> 00:10:33,120 got that 5year term what happens at the 286 00:10:33,120 --> 00:10:35,279 end of the 5 years so what we do is when 287 00:10:35,279 --> 00:10:37,079 we settle a commercial loan and most 288 00:10:37,079 --> 00:10:39,839 banks have this as well um there is a a 289 00:10:39,839 --> 00:10:41,680 banker that's allocated that looks after 290 00:10:41,680 --> 00:10:43,680 it so that if something happens in the 291 00:10:43,680 --> 00:10:45,880 background or the 5year term comes up or 292 00:10:45,880 --> 00:10:47,920 you want to do a variation it requires a 293 00:10:47,920 --> 00:10:49,720 little bit more work that's involved 294 00:10:49,720 --> 00:10:52,000 with this a straight residential loan so 295 00:10:52,000 --> 00:10:53,360 all commercial Banks generally will have 296 00:10:53,360 --> 00:10:55,120 a banker or someone allocated to help 297 00:10:55,120 --> 00:10:57,200 out or to manage that client going 298 00:10:57,200 --> 00:10:59,440 forward so ongoing require ments are 299 00:10:59,440 --> 00:11:00,720 there to support it normally there's 300 00:11:00,720 --> 00:11:02,240 more maintenance and stuff required with 301 00:11:02,240 --> 00:11:05,560 commercial yeah y that makes sense 302 00:11:05,560 --> 00:11:07,800 so you know you touched on the fact that 303 00:11:07,800 --> 00:11:09,639 there's always a banker involved and I 304 00:11:09,639 --> 00:11:12,079 wanted to ask you that question because 305 00:11:12,079 --> 00:11:14,279 a lot of um borrowers out there don't 306 00:11:14,279 --> 00:11:16,160 realize that there's a a business Banker 307 00:11:16,160 --> 00:11:18,040 involved so it's another layer to get to 308 00:11:18,040 --> 00:11:20,320 to credit and I always explain this to 309 00:11:20,320 --> 00:11:22,200 to my potential customers or existing 310 00:11:22,200 --> 00:11:24,000 customers that when you go for 311 00:11:24,000 --> 00:11:26,519 residential lending it's basically me as 312 00:11:26,519 --> 00:11:30,079 a broker straight to credit it goes into 313 00:11:30,079 --> 00:11:33,040 a basically a a machine and then someone 314 00:11:33,040 --> 00:11:35,079 at credit you know pre-edit might check 315 00:11:35,079 --> 00:11:36,800 the documents and then someone in credit 316 00:11:36,800 --> 00:11:38,639 will approve it or assess it to for an 317 00:11:38,639 --> 00:11:41,279 approval whereas with with commercial 318 00:11:41,279 --> 00:11:45,560 lending it's me as a broker to a banker 319 00:11:45,560 --> 00:11:47,000 sometimes to you as a relationship 320 00:11:47,000 --> 00:11:48,800 manager who then allocates the banker 321 00:11:48,800 --> 00:11:50,000 depending on the 322 00:11:50,000 --> 00:11:53,320 location and then what happens is the 323 00:11:53,320 --> 00:11:55,760 banker reviews it sometimes that Banker 324 00:11:55,760 --> 00:11:58,079 even has a credit coach uh or a state 325 00:11:58,079 --> 00:12:00,920 manager that they sort of refer uh the 326 00:12:00,920 --> 00:12:02,720 deals to and help them structure it and 327 00:12:02,720 --> 00:12:03,920 make sure that you know there's an 328 00:12:03,920 --> 00:12:06,000 appetite for credit and that you know 329 00:12:06,000 --> 00:12:07,639 they answer all the questions and then 330 00:12:07,639 --> 00:12:10,240 they present the deal to credit so that 331 00:12:10,240 --> 00:12:12,480 that's why it can can take longer and 332 00:12:12,480 --> 00:12:14,800 it's more complexity right 333 00:12:14,800 --> 00:12:18,279 so I wanted to ask I guess why you think 334 00:12:18,279 --> 00:12:19,279 that is and do you think that will 335 00:12:19,279 --> 00:12:22,040 continue for the future um or do you 336 00:12:22,040 --> 00:12:23,360 think eventually it will become more 337 00:12:23,360 --> 00:12:24,920 streamlined and you'll be able to sort 338 00:12:24,920 --> 00:12:26,760 of go straight to credit and you know 339 00:12:26,760 --> 00:12:28,639 potentially cut out the bankers yeah 340 00:12:28,639 --> 00:12:30,199 well I guess that's a wait and see on 341 00:12:30,199 --> 00:12:32,760 the future and see what happens um you 342 00:12:32,760 --> 00:12:34,920 might look at it like an extra layer but 343 00:12:34,920 --> 00:12:36,760 for those people that don't really do a 344 00:12:36,760 --> 00:12:38,600 lot of commercial in the background it's 345 00:12:38,600 --> 00:12:40,760 a chance that cuz commercial lending is 346 00:12:40,760 --> 00:12:43,320 judgmental it gives them a chance to a 347 00:12:43,320 --> 00:12:44,880 they check the application they make 348 00:12:44,880 --> 00:12:46,480 sure it servicing Works they'll let you 349 00:12:46,480 --> 00:12:48,760 know and then they push into the system 350 00:12:48,760 --> 00:12:50,680 and they deal with credit direct it's 351 00:12:50,680 --> 00:12:52,760 kind of a second line to check and make 352 00:12:52,760 --> 00:12:54,199 sure it does it work before we've 353 00:12:54,199 --> 00:12:55,800 actually done a credit search or 354 00:12:55,800 --> 00:12:57,160 anything on the client so we're not 355 00:12:57,160 --> 00:12:59,279 putting him like hurting a credit file 356 00:12:59,279 --> 00:13:00,279 if it's not something we'll be able to 357 00:13:00,279 --> 00:13:02,480 do in the background cuz on residential 358 00:13:02,480 --> 00:13:03,680 you can do a lot of the research 359 00:13:03,680 --> 00:13:05,720 yourself credit policies are online 360 00:13:05,720 --> 00:13:07,519 you'll use bredia or something you'll 361 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 through 363 00:13:11,199 --> 00:13:12,920 with the finance year but because 364 00:13:12,920 --> 00:13:15,240 commercial is judgmental policies 365 00:13:15,240 --> 00:13:16,720 generally are not online across most 366 00:13:16,720 --> 00:13:18,880 lenders so you're relying because it can 367 00:13:18,880 --> 00:13:20,839 change appetite can change across banks 368 00:13:20,839 --> 00:13:23,079 with commercial so the banker is there 369 00:13:23,079 --> 00:13:24,920 to help support and say Hey listen will 370 00:13:24,920 --> 00:13:26,800 this work with A&Z they'll check the 371 00:13:26,800 --> 00:13:28,120 servicing they're just double-checking 372 00:13:28,120 --> 00:13:29,639 your work to make sure and then they'll 373 00:13:29,639 --> 00:13:32,320 push it in cuz then they'll be 99% sure 374 00:13:32,320 --> 00:13:34,040 that it'll work as well before we've 375 00:13:34,040 --> 00:13:35,959 actually put a credit hit or something 376 00:13:35,959 --> 00:13:37,839 on the client and so we don't do 377 00:13:37,839 --> 00:13:39,079 anything adverse if it's something that 378 00:13:39,079 --> 00:13:40,519 we may not be able to assist with but 379 00:13:40,519 --> 00:13:41,920 they're there to check and make sure and 380 00:13:41,920 --> 00:13:43,160 they'll do with the credit assessor in 381 00:13:43,160 --> 00:13:45,560 the background as well yeah yeah I 382 00:13:45,560 --> 00:13:47,959 actually do like it to be honest because 383 00:13:47,959 --> 00:13:50,600 they do it day in day out all right and 384 00:13:50,600 --> 00:13:52,519 you know I do quite a bit of commercial 385 00:13:52,519 --> 00:13:53,959 deals but most of them are property 386 00:13:53,959 --> 00:13:56,040 related as soon as you start involving 387 00:13:56,040 --> 00:13:58,279 more complexity with trading businesses 388 00:13:58,279 --> 00:14:00,519 and working capital and acquisition 389 00:14:00,519 --> 00:14:04,279 loans overdrafts trade Finance invoice 390 00:14:04,279 --> 00:14:06,839 Finance asset Finance like it's that's 391 00:14:06,839 --> 00:14:08,680 the exciting stuff it's very it's very 392 00:14:08,680 --> 00:14:10,639 broad it's a lot you can do and if 393 00:14:10,639 --> 00:14:12,360 you're if you're not experienced you do 394 00:14:12,360 --> 00:14:14,360 need someone who can kind of you know 395 00:14:14,360 --> 00:14:16,480 guide you through it and help you 396 00:14:16,480 --> 00:14:18,519 structure it in a way that's going to be 397 00:14:18,519 --> 00:14:21,440 you know feasible for the customer and 398 00:14:21,440 --> 00:14:24,759 uh and for the bank right um but I also 399 00:14:24,759 --> 00:14:26,680 wanted to ask about the the teer 400 00:14:26,680 --> 00:14:29,759 structure you have so each bank is a 401 00:14:29,759 --> 00:14:31,000 little bit different some of them will 402 00:14:31,000 --> 00:14:32,639 go up to 1 million anything a million to 403 00:14:32,639 --> 00:14:34,240 three is another Banker anything 3 404 00:14:34,240 --> 00:14:36,440 million to five is another A&Z has 405 00:14:36,440 --> 00:14:39,240 recently increase that to 1.5 million 406 00:14:39,240 --> 00:14:41,000 and that falls under small business 407 00:14:41,000 --> 00:14:43,199 under small business you can do a lot of 408 00:14:43,199 --> 00:14:48,560 cool stuff um I.E 30-year loans 80% lvr 409 00:14:48,560 --> 00:14:51,759 if it's a if it's a property loan and uh 410 00:14:51,759 --> 00:14:53,720 you've also got something called rapid 411 00:14:53,720 --> 00:14:55,440 refinance and 412 00:14:55,440 --> 00:14:58,240 streamline um and streamline you know I 413 00:14:58,240 --> 00:14:59,959 I saw recent email saying that we can do 414 00:14:59,959 --> 00:15:03,000 with one bz so I know I've just touched 415 00:15:03,000 --> 00:15:05,600 on about three different things there um 416 00:15:05,600 --> 00:15:07,399 do you mind elaborating a little bit on 417 00:15:07,399 --> 00:15:08,920 that in terms of the te structure and 418 00:15:08,920 --> 00:15:10,959 also that you know why 1 a half million 419 00:15:10,959 --> 00:15:13,440 is you know probably the good spot to 420 00:15:13,440 --> 00:15:14,920 yeah well you've passed the test you 421 00:15:14,920 --> 00:15:16,399 remembered exactly what we've got in our 422 00:15:16,399 --> 00:15:18,839 streamline space um well for a and z 423 00:15:18,839 --> 00:15:21,000 side of it that one we did have 1 424 00:15:21,000 --> 00:15:23,480 million um and through sort of assets we 425 00:15:23,480 --> 00:15:25,440 increase that to 1 and a half which is 426 00:15:25,440 --> 00:15:27,240 what we call we base that on our retail 427 00:15:27,240 --> 00:15:29,240 credit policy which means yes we do have 428 00:15:29,240 --> 00:15:31,240 a little bit that that exciting side 429 00:15:31,240 --> 00:15:33,319 where we call it streamlined where we 430 00:15:33,319 --> 00:15:35,440 can use a bass and self- declared income 431 00:15:35,440 --> 00:15:37,399 to help support trading business so they 432 00:15:37,399 --> 00:15:38,880 can look to buy their own occupied 433 00:15:38,880 --> 00:15:40,440 property where we may not need 434 00:15:40,440 --> 00:15:42,600 financials and then yes we have got our 435 00:15:42,600 --> 00:15:45,600 raid refinance our 30-year loan terms 10 436 00:15:45,600 --> 00:15:48,199 years interest only um some right now 437 00:15:48,199 --> 00:15:50,480 we've got refinance fee wavers simple 438 00:15:50,480 --> 00:15:52,839 switch in the background um that goes up 439 00:15:52,839 --> 00:15:54,800 to a 1 and a half million above 1 and 440 00:15:54,800 --> 00:15:56,360 half million then we move into wholesale 441 00:15:56,360 --> 00:15:57,959 credit policy and that's where it 442 00:15:57,959 --> 00:15:59,279 becomes judge judgmental in the 443 00:15:59,279 --> 00:16:01,279 background and we don't have sort of the 444 00:16:01,279 --> 00:16:03,519 system credit policy side of it it's 445 00:16:03,519 --> 00:16:05,519 more of a judgmental where we might get 446 00:16:05,519 --> 00:16:07,360 the two years of financials you need the 447 00:16:07,360 --> 00:16:08,920 lease and you'll start having annual 448 00:16:08,920 --> 00:16:11,079 reviews on the loans as well so for us 449 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 I 451 00:16:15,120 --> 00:16:16,560 do like because that's how we get that 452 00:16:16,560 --> 00:16:18,680 sort of stuff in the background um and 453 00:16:18,680 --> 00:16:20,279 then we also have a small tier of our 454 00:16:20,279 --> 00:16:22,639 small business space for that 0 to 300 455 00:16:22,639 --> 00:16:24,199 as well where we have our small business 456 00:16:24,199 --> 00:16:25,600 Specialists that help support just 457 00:16:25,600 --> 00:16:27,519 Branch or small clients wanting to set 458 00:16:27,519 --> 00:16:30,000 up as well okay oh yeah that makes sense 459 00:16:30,000 --> 00:16:33,880 and the higher you go the the products 460 00:16:33,880 --> 00:16:38,519 become I guess more limited to an extent 461 00:16:38,519 --> 00:16:42,480 um they the pricing is different the 462 00:16:42,480 --> 00:16:46,480 pricing model the appetite um it's more 463 00:16:46,480 --> 00:16:48,360 complex right it's higher risk to the 464 00:16:48,360 --> 00:16:50,399 bank 465 00:16:50,399 --> 00:16:52,920 so I want to ask a little bit about that 466 00:16:52,920 --> 00:16:57,720 but also um around uh specialities right 467 00:16:57,720 --> 00:17:00,480 because it's not just you know this is a 468 00:17:00,480 --> 00:17:02,600 trading business or this is a you know 469 00:17:02,600 --> 00:17:04,039 an employee wanting to purchase a 470 00:17:04,039 --> 00:17:05,919 commercial property if they're in a 471 00:17:05,919 --> 00:17:08,559 certain industry you might have 472 00:17:08,559 --> 00:17:10,280 Specialists that understand that 473 00:17:10,280 --> 00:17:14,199 industry and they understand how they uh 474 00:17:14,199 --> 00:17:16,760 generate income their sales cycle you 475 00:17:16,760 --> 00:17:19,199 know um you know cuz a lot of them say 476 00:17:19,199 --> 00:17:21,199 for example agriculture the way they 477 00:17:21,199 --> 00:17:23,959 receive income is different to another 478 00:17:23,959 --> 00:17:27,400 type of business you know um medical so 479 00:17:27,400 --> 00:17:30,400 doctors and uh in vets and whatnot they 480 00:17:30,400 --> 00:17:33,320 receive income differently as well um 481 00:17:33,320 --> 00:17:35,360 can you elaborate a little bit on that M 482 00:17:35,360 --> 00:17:37,080 well this is the exciting part so you've 483 00:17:37,080 --> 00:17:38,720 got to get into this more is the fact 484 00:17:38,720 --> 00:17:40,039 that when you sit down with a client and 485 00:17:40,039 --> 00:17:43,000 talk around what do you do and then all 486 00:17:43,000 --> 00:17:44,520 of a sudden it brings out a whole heap 487 00:17:44,520 --> 00:17:46,000 of everything in the background which 488 00:17:46,000 --> 00:17:47,480 you know ranges from things like Bank 489 00:17:47,480 --> 00:17:49,960 guarantees overdrafts working capital 490 00:17:49,960 --> 00:17:52,480 business loans uh business credit cards 491 00:17:52,480 --> 00:17:54,600 trade Finance that's I I find the 492 00:17:54,600 --> 00:17:55,960 exciting part why I'm still in 493 00:17:55,960 --> 00:17:57,640 commercial and then you're asking about 494 00:17:57,640 --> 00:17:59,320 future plans for client and that's what 495 00:17:59,320 --> 00:18:01,559 starts to uncover um everything that we 496 00:18:01,559 --> 00:18:03,080 can provide in the background and this 497 00:18:03,080 --> 00:18:05,919 is where the banker helps as well you're 498 00:18:05,919 --> 00:18:07,640 right our small business space does have 499 00:18:07,640 --> 00:18:09,799 a lot of policy low do and Lease do when 500 00:18:09,799 --> 00:18:11,520 you move into above into the wholesale 501 00:18:11,520 --> 00:18:14,159 credit policy yes it may limit like some 502 00:18:14,159 --> 00:18:16,159 of the options you've got but all of a 503 00:18:16,159 --> 00:18:18,440 sudden it opens up different Avenues of 504 00:18:18,440 --> 00:18:21,080 like the trade Finance transactive for 505 00:18:21,080 --> 00:18:22,520 business which is a different type of 506 00:18:22,520 --> 00:18:24,200 internet banking platform for larger 507 00:18:24,200 --> 00:18:26,840 clients when they've got accountants and 508 00:18:26,840 --> 00:18:28,159 people who want to actually have access 509 00:18:28,159 --> 00:18:30,200 to the accounts and do the book work in 510 00:18:30,200 --> 00:18:31,840 the background so it also starts 511 00:18:31,840 --> 00:18:35,000 bringing in additional support so our 512 00:18:35,000 --> 00:18:36,880 relationship managers who do above 1 and 513 00:18:36,880 --> 00:18:38,600 half million they have an assistant so 514 00:18:38,600 --> 00:18:39,960 someone is actually there even if 515 00:18:39,960 --> 00:18:42,480 they're on the road that client can call 516 00:18:42,480 --> 00:18:44,640 get the assistant manager to help out 517 00:18:44,640 --> 00:18:46,120 and then you start going to corporate 518 00:18:46,120 --> 00:18:47,440 and the sudden corporate have two 519 00:18:47,440 --> 00:18:49,120 assistants in the background so the 520 00:18:49,120 --> 00:18:50,760 higher you get the more support your 521 00:18:50,760 --> 00:18:52,919 business needs on the trading side of it 522 00:18:52,919 --> 00:18:53,960 but then yeah you've got the little 523 00:18:53,960 --> 00:18:56,760 add-ons so Health on the side which 524 00:18:56,760 --> 00:18:58,280 obviously you know Everyone likes 525 00:18:58,280 --> 00:18:59,799 doctors they do make some money at the 526 00:18:59,799 --> 00:19:01,679 end of the day so they've got separate 527 00:19:01,679 --> 00:19:03,640 policies that sit outside of it as well 528 00:19:03,640 --> 00:19:05,840 we have agriculture which we're quite 529 00:19:05,840 --> 00:19:07,600 strong across you know the regions as 530 00:19:07,600 --> 00:19:09,280 well we have business centers across 531 00:19:09,280 --> 00:19:11,320 where we'll probably ask for 3 years of 532 00:19:11,320 --> 00:19:13,039 History to show because coming off the 533 00:19:13,039 --> 00:19:15,320 back of say floods or something we might 534 00:19:15,320 --> 00:19:16,760 we want to see what's been going on that 535 00:19:16,760 --> 00:19:18,080 time and they've got different working 536 00:19:18,080 --> 00:19:20,200 capital life cycles when you're thinking 537 00:19:20,200 --> 00:19:22,720 it could be grain dairy in the 538 00:19:22,720 --> 00:19:24,679 background they're going to you know how 539 00:19:24,679 --> 00:19:26,880 they work is a lot different so yeah we 540 00:19:26,880 --> 00:19:28,799 do have specialist Industries across 541 00:19:28,799 --> 00:19:31,760 the areas as well um it's just because 542 00:19:31,760 --> 00:19:33,880 yeah those businesses work different 543 00:19:33,880 --> 00:19:36,480 yeah that makes sense so it's really 544 00:19:36,480 --> 00:19:38,919 about supporting businesses when it 545 00:19:38,919 --> 00:19:41,000 really comes down to it CU even if if 546 00:19:41,000 --> 00:19:42,799 you're talking about an investor and 547 00:19:42,799 --> 00:19:45,240 that investor doesn't have a business 548 00:19:45,240 --> 00:19:46,760 and they're wanting to buy a commercial 549 00:19:46,760 --> 00:19:48,799 property where they generate rental 550 00:19:48,799 --> 00:19:50,720 income well the rental income is being 551 00:19:50,720 --> 00:19:53,320 paid by business right that business is 552 00:19:53,320 --> 00:19:54,840 is the tenant so you're actually 553 00:19:54,840 --> 00:19:57,120 supporting business on in commercial 554 00:19:57,120 --> 00:19:58,720 lending and that's what it seems like to 555 00:19:58,720 --> 00:20:00,440 me more than anything else whereas 556 00:20:00,440 --> 00:20:03,039 retail you're supporting the mom and dad 557 00:20:03,039 --> 00:20:06,559 right with their personal stuff 558 00:20:06,559 --> 00:20:09,320 um one thing that's come up in the past 559 00:20:09,320 --> 00:20:13,200 was with some banks their pricing model 560 00:20:13,200 --> 00:20:16,200 for commercial uses What's called the 561 00:20:16,200 --> 00:20:21,240 BBS y or bbsw or Bank Bill swap rate and 562 00:20:21,240 --> 00:20:24,679 then there's a uh you know bank or base 563 00:20:24,679 --> 00:20:26,520 rate and there you know there's a you 564 00:20:26,520 --> 00:20:28,919 know a margin on top Etc and then you 565 00:20:28,919 --> 00:20:31,280 sort of you know they call it a Market's 566 00:20:31,280 --> 00:20:32,600 loan sometimes where it actually 567 00:20:32,600 --> 00:20:36,360 fluctuates monthly um or sometimes three 568 00:20:36,360 --> 00:20:39,880 monthly or you know quarterly does a do 569 00:20:39,880 --> 00:20:41,760 that as well is that anything over 1 and 570 00:20:41,760 --> 00:20:44,159 a half million and onwards that they 571 00:20:44,159 --> 00:20:47,280 sort of repic it on a regular basis yeah 572 00:20:47,280 --> 00:20:49,760 look across the whole spectrum of the 573 00:20:49,760 --> 00:20:51,720 areas we deal with and pricing is 574 00:20:51,720 --> 00:20:53,480 individual so it depends on what you're 575 00:20:53,480 --> 00:20:54,960 looking at doing so if you're just 576 00:20:54,960 --> 00:20:56,720 looking at buying an investment property 577 00:20:56,720 --> 00:20:58,760 what comes into play is what's the loan 578 00:20:58,760 --> 00:21:01,440 to value ratio we're looking at um 579 00:21:01,440 --> 00:21:03,360 sometimes even you know they lease the 580 00:21:03,360 --> 00:21:05,480 tenant how long they're in there for um 581 00:21:05,480 --> 00:21:08,120 to they you bank with a andz or not um 582 00:21:08,120 --> 00:21:09,039 and then all of a sudden it might be 583 00:21:09,039 --> 00:21:10,919 industry Once you turn into a trading 584 00:21:10,919 --> 00:21:12,760 business as well if that's what you're 585 00:21:12,760 --> 00:21:15,120 looking at doing a lot of things go into 586 00:21:15,120 --> 00:21:17,039 factor into it whereas on home loans 587 00:21:17,039 --> 00:21:18,480 generally it's just the loan to value 588 00:21:18,480 --> 00:21:19,880 ratio and how much you're looking at 589 00:21:19,880 --> 00:21:22,120 borrowing so there's only two factors so 590 00:21:22,120 --> 00:21:23,880 on the commercial we have maybe four or 591 00:21:23,880 --> 00:21:26,279 five different things that go into it um 592 00:21:26,279 --> 00:21:27,640 and then that goes across the whole 593 00:21:27,640 --> 00:21:28,760 Spectrum 594 00:21:28,760 --> 00:21:30,440 but once you start do moving up into the 595 00:21:30,440 --> 00:21:31,760 Business Bank space you're using 596 00:21:31,760 --> 00:21:33,120 wholesale credit sometimes in the 597 00:21:33,120 --> 00:21:34,320 background which means they've got 598 00:21:34,320 --> 00:21:36,360 access to be able to ask for some more 599 00:21:36,360 --> 00:21:38,000 discounts off the back of it with the 600 00:21:38,000 --> 00:21:39,760 more lending you're getting but then all 601 00:21:39,760 --> 00:21:41,360 of a sudden the complexity of the client 602 00:21:41,360 --> 00:21:43,559 where yes you have you got a standard 603 00:21:43,559 --> 00:21:45,039 business loan where you'll just have 604 00:21:45,039 --> 00:21:47,360 your quarterly loan admin fee then you 605 00:21:47,360 --> 00:21:49,880 might have your line of credit um which 606 00:21:49,880 --> 00:21:52,279 is an working capital overdraft all of a 607 00:21:52,279 --> 00:21:54,120 sudden that's price different for risk 608 00:21:54,120 --> 00:21:55,880 because obviously you can keep eating 609 00:21:55,880 --> 00:21:57,799 away and we won't know that Mr repayment 610 00:21:57,799 --> 00:21:59,880 really until you hit the limit and then 611 00:21:59,880 --> 00:22:02,640 you'll start coming yes like your um BBS 612 00:22:02,640 --> 00:22:04,720 y plus a margin where you've actually 613 00:22:04,720 --> 00:22:06,320 just got a facility sitting there that's 614 00:22:06,320 --> 00:22:08,600 not always drawn and then you know 615 00:22:08,600 --> 00:22:09,880 you've got commercial construction where 616 00:22:09,880 --> 00:22:11,760 you're only using it as you draw it as 617 00:22:11,760 --> 00:22:14,559 well so you're right there is a a range 618 00:22:14,559 --> 00:22:16,279 of products it's not just a standard oh 619 00:22:16,279 --> 00:22:17,520 I'm getting a loan with an offset 620 00:22:17,520 --> 00:22:19,520 account there's a lot of different and 621 00:22:19,520 --> 00:22:20,600 you're trying and structure it to make 622 00:22:20,600 --> 00:22:22,520 sure that it's fitting what the client 623 00:22:22,520 --> 00:22:24,760 needs um because we have transactional 624 00:22:24,760 --> 00:22:26,200 banking managers Who come out for the 625 00:22:26,200 --> 00:22:28,440 bigger clients to talk with them okay 626 00:22:28,440 --> 00:22:30,320 maybe it's hedging okay you're importing 627 00:22:30,320 --> 00:22:31,760 from overseas maybe we should look at 628 00:22:31,760 --> 00:22:32,919 hedging some of the funds you're 629 00:22:32,919 --> 00:22:34,440 importing to take advantage of what the 630 00:22:34,440 --> 00:22:36,200 rates are doing right now so the 631 00:22:36,200 --> 00:22:38,559 complexity gets up there where we add on 632 00:22:38,559 --> 00:22:40,200 what that client needs to help give them 633 00:22:40,200 --> 00:22:42,559 the best you know support I love that 634 00:22:42,559 --> 00:22:45,120 because um any client will say okay 635 00:22:45,120 --> 00:22:46,120 you're trying to work with me what I 636 00:22:46,120 --> 00:22:47,360 need but really all I need is the 637 00:22:47,360 --> 00:22:48,520 cheapest rate 638 00:22:48,520 --> 00:22:51,080 ongoing but it's like it's not as simple 639 00:22:51,080 --> 00:22:53,799 as giving you that because um the way I 640 00:22:53,799 --> 00:22:55,520 explain to people is that you know 641 00:22:55,520 --> 00:22:57,520 commercial if you think about the word 642 00:22:57,520 --> 00:22:59,240 it's it's it's Commerce right it's doing 643 00:22:59,240 --> 00:23:00,880 business with each other so the 644 00:23:00,880 --> 00:23:03,520 transaction itself is about making money 645 00:23:03,520 --> 00:23:06,120 and about everybody making money so when 646 00:23:06,120 --> 00:23:09,279 people try to put on the you know the 647 00:23:09,279 --> 00:23:11,559 filter of I want to get money from the 648 00:23:11,559 --> 00:23:13,919 bank where I make money but they make 649 00:23:13,919 --> 00:23:16,440 nothing they're not the right customer 650 00:23:16,440 --> 00:23:17,600 they're not they're not looking at from 651 00:23:17,600 --> 00:23:20,000 the right angle because with consumer 652 00:23:20,000 --> 00:23:22,000 lending it's there's obviously a lot 653 00:23:22,000 --> 00:23:23,480 more transactions that happen on a 654 00:23:23,480 --> 00:23:27,279 day-to-day basis um and it's sort of you 655 00:23:27,279 --> 00:23:29,520 know tried to design in a way to protect 656 00:23:29,520 --> 00:23:31,799 the consumer so the attitude is how do I 657 00:23:31,799 --> 00:23:34,279 get the best rate lowest fees and then 658 00:23:34,279 --> 00:23:35,559 maintain that and you know keep 659 00:23:35,559 --> 00:23:37,400 switching to get that but in commercial 660 00:23:37,400 --> 00:23:39,960 lending it's not as easy to do that uh 661 00:23:39,960 --> 00:23:42,279 refinancing is tricky there's a lot more 662 00:23:42,279 --> 00:23:45,480 upfront cost to get in um 663 00:23:45,480 --> 00:23:47,880 the if you're wanting to get an offset 664 00:23:47,880 --> 00:23:50,640 account well most banks don't offer them 665 00:23:50,640 --> 00:23:53,320 AZ does if from from my knowledge it's 666 00:23:53,320 --> 00:23:56,120 sub 65% but recently they've removed it 667 00:23:56,120 --> 00:23:58,279 from the least stock product so it's not 668 00:23:58,279 --> 00:24:00,279 available for Le stock and I think why 669 00:24:00,279 --> 00:24:02,159 well it's because you got to make money 670 00:24:02,159 --> 00:24:05,880 and if somebody fully offsets their loan 671 00:24:05,880 --> 00:24:06,960 you've just got and done this 672 00:24:06,960 --> 00:24:08,440 transaction lent them the money so they 673 00:24:08,440 --> 00:24:10,640 can benefit well you make nothing you 674 00:24:10,640 --> 00:24:12,919 make a quarterly fee out of it but 675 00:24:12,919 --> 00:24:14,520 you're still as a bank you're still 676 00:24:14,520 --> 00:24:16,320 borrowing that money you're not lending 677 00:24:16,320 --> 00:24:18,360 out your own money so then now you have 678 00:24:18,360 --> 00:24:19,679 to still pay interest on it so you're 679 00:24:19,679 --> 00:24:21,480 actually losing money if somebody keeps 680 00:24:21,480 --> 00:24:24,120 upsetting am I right I'm not sure if the 681 00:24:24,120 --> 00:24:26,159 removal from the Le stock product was 682 00:24:26,159 --> 00:24:28,919 around making money but but um obviously 683 00:24:28,919 --> 00:24:30,640 it's one of those products where you buy 684 00:24:30,640 --> 00:24:32,440 an investment property you want the 685 00:24:32,440 --> 00:24:34,480 maximum taxation Advantage for it so 686 00:24:34,480 --> 00:24:36,000 it's less likely you probably going to 687 00:24:36,000 --> 00:24:38,640 use an offset account for it um I 688 00:24:38,640 --> 00:24:40,559 probably don't have the exact answer why 689 00:24:40,559 --> 00:24:42,520 it got removed from the lease stock side 690 00:24:42,520 --> 00:24:43,799 of it but I don't think it's because we 691 00:24:43,799 --> 00:24:45,039 want to make more money off the end of 692 00:24:45,039 --> 00:24:46,799 it um but it's probably a product you're 693 00:24:46,799 --> 00:24:48,799 not going to really offset if you've got 694 00:24:48,799 --> 00:24:50,240 a home loan or something you know you 695 00:24:50,240 --> 00:24:51,600 ask your accountant what's the best 696 00:24:51,600 --> 00:24:54,399 taxwise to do it you bought it for a 697 00:24:54,399 --> 00:24:56,159 investment to make some money and 698 00:24:56,159 --> 00:24:57,840 Taxation claims off the back of it so 699 00:24:57,840 --> 00:24:59,320 it's probably not what going to park 700 00:24:59,320 --> 00:25:04,080 your money in the background um but yeah 701 00:25:04,080 --> 00:25:06,080 no that's true I mean as I deal with 702 00:25:06,080 --> 00:25:07,919 investors you know a lot of them do have 703 00:25:07,919 --> 00:25:10,720 a a principal place of residence a PPR 704 00:25:10,720 --> 00:25:13,279 and um that's typically what they want 705 00:25:13,279 --> 00:25:15,679 offset it's only when they have excess 706 00:25:15,679 --> 00:25:17,200 Capital that they're like where do I put 707 00:25:17,200 --> 00:25:19,640 it because if I'm paying a higher rate 708 00:25:19,640 --> 00:25:21,440 on the commercial loan I want to offset 709 00:25:21,440 --> 00:25:24,200 that but yeah it's not designed for that 710 00:25:24,200 --> 00:25:26,679 so you know that's basically what you 711 00:25:26,679 --> 00:25:29,200 just said um um but the other thing is 712 00:25:29,200 --> 00:25:32,080 what I've seen um you know there's no 713 00:25:32,080 --> 00:25:33,559 Financial advice here but I've heard 714 00:25:33,559 --> 00:25:36,320 I've seen where even family members you 715 00:25:36,320 --> 00:25:38,240 know will put their money into the kids 716 00:25:38,240 --> 00:25:40,360 account for example to offset it in the 717 00:25:40,360 --> 00:25:41,960 home loans or whatever just temporarily 718 00:25:41,960 --> 00:25:43,919 so they're still reducing their interest 719 00:25:43,919 --> 00:25:47,279 but it's not their Capital as such so 720 00:25:47,279 --> 00:25:50,159 yeah ANZ has also got some pretty cool 721 00:25:50,159 --> 00:25:54,760 um offers where they'll um wave the fee 722 00:25:54,760 --> 00:25:57,640 um the the application fee uh and also 723 00:25:57,640 --> 00:25:59,360 to cover the valuation fee cuz a 724 00:25:59,360 --> 00:26:01,760 valuation for a commercial property can 725 00:26:01,760 --> 00:26:04,279 cost thousands of dollars right and it's 726 00:26:04,279 --> 00:26:06,720 usually at the customers cost is that 727 00:26:06,720 --> 00:26:07,880 something that's still ongoing at the 728 00:26:07,880 --> 00:26:09,480 moment yeah I guess it's probably a 729 00:26:09,480 --> 00:26:11,000 conversation you have you have with 730 00:26:11,000 --> 00:26:12,520 people a lot when they come to you and 731 00:26:12,520 --> 00:26:13,919 you talk around the Returns on a 732 00:26:13,919 --> 00:26:16,360 commercial and residential is when 733 00:26:16,360 --> 00:26:18,120 you're used to buying residential 734 00:26:18,120 --> 00:26:19,399 there's no cost normally there's no 735 00:26:19,399 --> 00:26:20,960 application fee there's no valuation 736 00:26:20,960 --> 00:26:22,559 there's nothing but when you're first 737 00:26:22,559 --> 00:26:24,120 time into a commercial and someone says 738 00:26:24,120 --> 00:26:26,080 to you oh your application fees is you 739 00:26:26,080 --> 00:26:29,000 know probably 75 or .5% of the loan 740 00:26:29,000 --> 00:26:30,360 amount and you're borrowing a million 741 00:26:30,360 --> 00:26:31,559 dollar and you say oh your application 742 00:26:31,559 --> 00:26:34,039 is $5,000 you probably you die in the 743 00:26:34,039 --> 00:26:36,000 background thinking what but you know 744 00:26:36,000 --> 00:26:39,279 those whove invested or in commercial um 745 00:26:39,279 --> 00:26:40,799 understand they hey there is more of a 746 00:26:40,799 --> 00:26:42,440 cost attach to it because there's a cost 747 00:26:42,440 --> 00:26:43,919 to serve you've got the bank there to 748 00:26:43,919 --> 00:26:45,559 support they're there for you ongoing as 749 00:26:45,559 --> 00:26:47,799 well um but yeah when you talk through 750 00:26:47,799 --> 00:26:49,880 the cost sometimes attached with it um 751 00:26:49,880 --> 00:26:51,520 but yes right now in our small business 752 00:26:51,520 --> 00:26:53,520 space especially um up until the end of 753 00:26:53,520 --> 00:26:54,960 the year if you're submitting before the 754 00:26:54,960 --> 00:26:57,039 31st of December then yes we're waving 755 00:26:57,039 --> 00:26:59,200 the application fee for refinances and 756 00:26:59,200 --> 00:27:00,720 we're covering the valuation cost up to 757 00:27:00,720 --> 00:27:03,080 2 Grand cuz generally your application 758 00:27:03,080 --> 00:27:04,919 fee say across different banks might 759 00:27:04,919 --> 00:27:07,880 range from like .5 to 75% of the loan 760 00:27:07,880 --> 00:27:10,320 amount and then your valuation might be 761 00:27:10,320 --> 00:27:14,240 1,000 2,000 3,000 depending on the size 762 00:27:14,240 --> 00:27:15,679 um and then outside of that it's 763 00:27:15,679 --> 00:27:17,440 generally just your government charges 764 00:27:17,440 --> 00:27:18,720 and stuff but there there's definitely a 765 00:27:18,720 --> 00:27:20,880 high cost for the commercial yeah uh 766 00:27:20,880 --> 00:27:22,200 that comes across but yes we do have a 767 00:27:22,200 --> 00:27:23,760 fee wer on until the end of the year 768 00:27:23,760 --> 00:27:25,520 it's been extended a couple of times so 769 00:27:25,520 --> 00:27:26,720 you know we're holding our breath we'll 770 00:27:26,720 --> 00:27:28,919 see what happens but it is a competitive 771 00:27:28,919 --> 00:27:31,480 market kind of similar with residential 772 00:27:31,480 --> 00:27:33,640 sometimes in terms of commercial um but 773 00:27:33,640 --> 00:27:35,159 with our recent changes in our small 774 00:27:35,159 --> 00:27:37,640 business space and our lease type 775 00:27:37,640 --> 00:27:40,279 product um we want to be about a market 776 00:27:40,279 --> 00:27:42,399 and we're here to support clients yeah 777 00:27:42,399 --> 00:27:44,399 yeah no um the reason I have you one is 778 00:27:44,399 --> 00:27:46,720 because I'm a big supporter of AZ and 779 00:27:46,720 --> 00:27:49,399 I've got a few uh deals at the moment 780 00:27:49,399 --> 00:27:52,320 with Az all across the country and I 781 00:27:52,320 --> 00:27:53,919 find it interesting that it's not based 782 00:27:53,919 --> 00:27:55,880 on where the customer is buying it's 783 00:27:55,880 --> 00:27:57,679 based on where they live and and it 784 00:27:57,679 --> 00:27:59,080 makes sense it's because you know they 785 00:27:59,080 --> 00:28:01,519 need to have a a local Banker that 786 00:28:01,519 --> 00:28:04,279 understands I guess the one they can 787 00:28:04,279 --> 00:28:06,799 meet the customer you know know your kyc 788 00:28:06,799 --> 00:28:10,080 know your customer um but also so they 789 00:28:10,080 --> 00:28:12,440 can maintain a relationship after 790 00:28:12,440 --> 00:28:13,760 settlement right they want to still have 791 00:28:13,760 --> 00:28:16,080 a point of contact afterwards so if 792 00:28:16,080 --> 00:28:17,399 they're in a different state it's 793 00:28:17,399 --> 00:28:20,200 obviously harder to to manage um so I've 794 00:28:20,200 --> 00:28:22,240 got one like two in two different parts 795 00:28:22,240 --> 00:28:25,039 of Queensland couple in Melbourne New 796 00:28:25,039 --> 00:28:27,159 South Wales and it's all based on where 797 00:28:27,159 --> 00:28:29,600 the CL lives so it's good it gets me to 798 00:28:29,600 --> 00:28:32,279 meet different uh Bankers all across the 799 00:28:32,279 --> 00:28:33,880 country and you've been really helpful 800 00:28:33,880 --> 00:28:35,559 in introducing me to the right people so 801 00:28:35,559 --> 00:28:37,640 thank you for that um that's why we call 802 00:28:37,640 --> 00:28:39,080 them relationship managers because 803 00:28:39,080 --> 00:28:40,080 they're there to help the clients 804 00:28:40,080 --> 00:28:42,000 ongoing in the background help sign loan 805 00:28:42,000 --> 00:28:44,399 documents yes do the kyc part of it but 806 00:28:44,399 --> 00:28:46,480 it's also ongoing say 6 months down the 807 00:28:46,480 --> 00:28:48,679 track they ask oh the tenant's moving 808 00:28:48,679 --> 00:28:50,600 out or I need to rev my interest rates 809 00:28:50,600 --> 00:28:52,480 or I need another account or now I'm 810 00:28:52,480 --> 00:28:54,480 going to open a second store then 811 00:28:54,480 --> 00:28:56,399 somebody local knows them understands 812 00:28:56,399 --> 00:28:57,760 their business and helps to to tailor 813 00:28:57,760 --> 00:28:59,360 the next lot of products as they grow as 814 00:28:59,360 --> 00:29:02,600 well m one of the questions that comes 815 00:29:02,600 --> 00:29:04,519 up a lot for me and I always have to 816 00:29:04,519 --> 00:29:06,080 explain this to clients from my 817 00:29:06,080 --> 00:29:07,320 perspective but I'd like to hear it from 818 00:29:07,320 --> 00:29:09,519 you it's what happens if someone does 819 00:29:09,519 --> 00:29:13,559 get a Le stock loan and the tenant moves 820 00:29:13,559 --> 00:29:16,880 out and it's vacant so it's coming up 821 00:29:16,880 --> 00:29:19,559 towards the end and obviously that loan 822 00:29:19,559 --> 00:29:21,559 is not going to be renewed unless you've 823 00:29:21,559 --> 00:29:23,000 got tenants because that's how the the 824 00:29:23,000 --> 00:29:24,240 loan is being 825 00:29:24,240 --> 00:29:26,919 serviced what does the bank do in that 826 00:29:26,919 --> 00:29:28,039 situation 827 00:29:28,039 --> 00:29:29,480 generally it's trying to work with the 828 00:29:29,480 --> 00:29:31,200 client we normally don't if they've 829 00:29:31,200 --> 00:29:33,559 moved out midterm we actually normally 830 00:29:33,559 --> 00:29:34,840 don't know because if the rep payments 831 00:29:34,840 --> 00:29:36,120 are still being made it's not something 832 00:29:36,120 --> 00:29:37,799 we monitor until it comes up for its 833 00:29:37,799 --> 00:29:39,880 renewal or if they're on annual review 834 00:29:39,880 --> 00:29:41,559 in the background normally it's working 835 00:29:41,559 --> 00:29:43,760 with the client to see hey how long do 836 00:29:43,760 --> 00:29:45,000 they think it's going to take making 837 00:29:45,000 --> 00:29:46,960 sure that the property's on the market 838 00:29:46,960 --> 00:29:49,159 no one's going to be putting people into 839 00:29:49,159 --> 00:29:50,679 no one wants to be putting people into 840 00:29:50,679 --> 00:29:52,480 sort of any lending services or selling 841 00:29:52,480 --> 00:29:54,039 a property in the background sometimes 842 00:29:54,039 --> 00:29:56,240 it's just a set vacant period do they 843 00:29:56,240 --> 00:29:57,559 have enough support to make their 844 00:29:57,559 --> 00:29:59,399 payments in that short period of time do 845 00:29:59,399 --> 00:30:01,080 we need to restructure it into a small 846 00:30:01,080 --> 00:30:02,760 interest only or something if it was on 847 00:30:02,760 --> 00:30:04,880 principal and interest more it's working 848 00:30:04,880 --> 00:30:06,840 with people in the background and that's 849 00:30:06,840 --> 00:30:08,880 just an ongoing discussion that happens 850 00:30:08,880 --> 00:30:10,279 individually in the background so it's 851 00:30:10,279 --> 00:30:12,919 important that the um the customers stay 852 00:30:12,919 --> 00:30:16,120 in contact and and open and honest about 853 00:30:16,120 --> 00:30:18,159 it and not hiding in the background 854 00:30:18,159 --> 00:30:19,279 saying what do I do the bank's going to 855 00:30:19,279 --> 00:30:20,960 take my property cuz that's the fear 856 00:30:20,960 --> 00:30:24,519 they all have but I mean from my 857 00:30:24,519 --> 00:30:26,200 understanding the bank can't really just 858 00:30:26,200 --> 00:30:27,919 go and repossess it unless they go 859 00:30:27,919 --> 00:30:29,760 through the you know standard procedure 860 00:30:29,760 --> 00:30:33,799 of you know um I don't know 30 days 90 861 00:30:33,799 --> 00:30:35,679 days out and then there's judgment and 862 00:30:35,679 --> 00:30:37,519 things like that they have to go through 863 00:30:37,519 --> 00:30:38,399 and that's only if you're not 864 00:30:38,399 --> 00:30:40,200 communicating and you're not trying to 865 00:30:40,200 --> 00:30:41,919 make repayments or trying to be flexible 866 00:30:41,919 --> 00:30:44,159 and you know um setting up the right 867 00:30:44,159 --> 00:30:46,480 structures to help you and the bank if 868 00:30:46,480 --> 00:30:48,039 you just avoid them and stop taking 869 00:30:48,039 --> 00:30:49,760 calls and not reply to letters that's 870 00:30:49,760 --> 00:30:50,640 what's going to happen right they're 871 00:30:50,640 --> 00:30:53,399 going to come knocking I haven't seen it 872 00:30:53,399 --> 00:30:55,200 but yeah you'd like to think so 873 00:30:55,200 --> 00:30:57,760 communication is the key yeah so it's 874 00:30:57,760 --> 00:31:00,240 not as risky as as 875 00:31:00,240 --> 00:31:02,240 perceived yes of course if you didn't 876 00:31:02,240 --> 00:31:04,000 get the right asset and this is why I do 877 00:31:04,000 --> 00:31:06,440 like to work with um you know reputable 878 00:31:06,440 --> 00:31:09,559 commercial um buyers agents because 879 00:31:09,559 --> 00:31:11,039 there's a lot more that goes into 880 00:31:11,039 --> 00:31:13,519 selecting the property negotiating it 881 00:31:13,519 --> 00:31:15,360 and then doing it due diligence to make 882 00:31:15,360 --> 00:31:17,639 sure there is a solid investment because 883 00:31:17,639 --> 00:31:19,799 the highest risk is uh you know 884 00:31:19,799 --> 00:31:22,559 long-term vacancy which leads me to my 885 00:31:22,559 --> 00:31:26,159 next question is I found out that A&Z 886 00:31:26,159 --> 00:31:30,279 sees retail properties as higher risk 887 00:31:30,279 --> 00:31:32,799 and they cap the lvr Lear to Value ratio 888 00:31:32,799 --> 00:31:36,039 at 55% mhm that's only on the least doct 889 00:31:36,039 --> 00:31:37,679 though if it's full duck you can go 890 00:31:37,679 --> 00:31:39,799 higher because you're um not necessar 891 00:31:39,799 --> 00:31:40,960 full duck but you know the other 892 00:31:40,960 --> 00:31:42,679 products where you're you know using 893 00:31:42,679 --> 00:31:45,159 other forms of income to servic it is 894 00:31:45,159 --> 00:31:48,200 this because of Co it's this is why we 895 00:31:48,200 --> 00:31:50,240 call Commercial judgmental and why we 896 00:31:50,240 --> 00:31:51,880 give you a banker because this will move 897 00:31:51,880 --> 00:31:54,679 up and down but off yes you're you're on 898 00:31:54,679 --> 00:31:56,200 the right Mark where you know coming off 899 00:31:56,200 --> 00:31:57,919 the back of Co a lot of retail stores 900 00:31:57,919 --> 00:32:00,320 did close down and hav't all come back 901 00:32:00,320 --> 00:32:02,559 to normal trading in the background um 902 00:32:02,559 --> 00:32:04,600 it is we can actually on a caseby casee 903 00:32:04,600 --> 00:32:06,919 basis look at more than that 55 because 904 00:32:06,919 --> 00:32:08,120 commercial lending doesn't always have 905 00:32:08,120 --> 00:32:10,279 to be secured if you're thinking lease 906 00:32:10,279 --> 00:32:12,399 stock probably more likely yes but if 907 00:32:12,399 --> 00:32:13,519 you're thinking there's a trading 908 00:32:13,519 --> 00:32:14,840 business or other income in the 909 00:32:14,840 --> 00:32:16,720 background we can potentially use to 910 00:32:16,720 --> 00:32:19,360 support it we can look at a higher lvr 911 00:32:19,360 --> 00:32:21,919 for it but policy side for the moment 912 00:32:21,919 --> 00:32:23,760 yes and I think that probably little bit 913 00:32:23,760 --> 00:32:25,559 through Co it came to part cuz a lot of 914 00:32:25,559 --> 00:32:27,120 stores were closing down you've you've 915 00:32:27,120 --> 00:32:29,519 seen it as you walk around but it's not 916 00:32:29,519 --> 00:32:32,919 a a hard and fast rule I wouldn't think 917 00:32:32,919 --> 00:32:34,600 oh we're not thinking about a and z for 918 00:32:34,600 --> 00:32:36,200 this application because they've got a 919 00:32:36,200 --> 00:32:39,840 55% OVR I'd still present it you know um 920 00:32:39,840 --> 00:32:41,480 because we'll still consider stuff for a 921 00:32:41,480 --> 00:32:43,200 strong client you might have extra 922 00:32:43,200 --> 00:32:45,000 Equity available maybe in your 923 00:32:45,000 --> 00:32:47,279 residential property to help support it 924 00:32:47,279 --> 00:32:49,039 in the background to get you that extra 925 00:32:49,039 --> 00:32:51,600 funds you might at 80% so sometimes 926 00:32:51,600 --> 00:32:52,679 we'll work with you to make sure 927 00:32:52,679 --> 00:32:54,320 something works or see if we can but it 928 00:32:54,320 --> 00:32:56,440 is judgmental because it can change 929 00:32:56,440 --> 00:32:59,960 appetite change across Banks there is 930 00:32:59,960 --> 00:33:02,440 some hard and fast rules when it comes 931 00:33:02,440 --> 00:33:04,480 to certain types of property though 932 00:33:04,480 --> 00:33:06,519 because you know if we look at 933 00:33:06,519 --> 00:33:09,200 commercial property you know standard 934 00:33:09,200 --> 00:33:11,519 property you know it comes down to you 935 00:33:11,519 --> 00:33:15,559 know retail um office and Industrial um 936 00:33:15,559 --> 00:33:17,399 as soon as you start going outside of 937 00:33:17,399 --> 00:33:21,120 that there's obviously agriculture you 938 00:33:21,120 --> 00:33:24,440 know Prime production um there's you 939 00:33:24,440 --> 00:33:27,840 know pubs Clubs petol St 940 00:33:27,840 --> 00:33:29,919 child Cent Age Care Cent it can get bit 941 00:33:29,919 --> 00:33:32,600 more specialized when it comes to those 942 00:33:32,600 --> 00:33:34,039 specialized 943 00:33:34,039 --> 00:33:36,840 assets does a and z look at them Case by 944 00:33:36,840 --> 00:33:39,360 case or do they also have some hard and 945 00:33:39,360 --> 00:33:42,279 fast say no that's a total exclusion I.E 946 00:33:42,279 --> 00:33:43,720 a brothel for 947 00:33:43,720 --> 00:33:45,799 example you know anything that's going 948 00:33:45,799 --> 00:33:47,639 to your reputational risk is probably a 949 00:33:47,639 --> 00:33:50,279 definite no when you think about that um 950 00:33:50,279 --> 00:33:52,399 but outside of that it is Case by case 951 00:33:52,399 --> 00:33:53,880 there is credit policy in the background 952 00:33:53,880 --> 00:33:55,600 for like a petrol station might have a 953 00:33:55,600 --> 00:33:58,159 50% lvr attached to to it but you got to 954 00:33:58,159 --> 00:33:59,760 step back and sometimes take your 955 00:33:59,760 --> 00:34:01,519 residential hat off not everything needs 956 00:34:01,519 --> 00:34:04,240 to be secured M we might say yes in a 957 00:34:04,240 --> 00:34:06,639 soft 50% over up but we'll consider up 958 00:34:06,639 --> 00:34:09,199 to 65 or 70 um it's just we might 959 00:34:09,199 --> 00:34:10,918 actually structure it slightly different 960 00:34:10,918 --> 00:34:13,159 we might do a partially secured loan or 961 00:34:13,159 --> 00:34:15,599 we might do say 50% is fully secured and 962 00:34:15,599 --> 00:34:18,000 a small portion is unsecured so this is 963 00:34:18,000 --> 00:34:19,520 where we work with you to bring what 964 00:34:19,520 --> 00:34:22,119 options we've got available um because 965 00:34:22,119 --> 00:34:23,520 commercial lending doesn't always have 966 00:34:23,520 --> 00:34:26,119 to have security so what do you mean by 967 00:34:26,119 --> 00:34:28,520 secured and unsecured just for the 968 00:34:28,520 --> 00:34:30,560 listeners yeah so secured is when you've 969 00:34:30,560 --> 00:34:31,960 got property to support it in the 970 00:34:31,960 --> 00:34:34,239 background um there are other ways of 971 00:34:34,239 --> 00:34:36,320 securing loans it's not just property if 972 00:34:36,320 --> 00:34:38,000 you're in angry sometimes it might be 973 00:34:38,000 --> 00:34:39,679 stock that you've got like it could be 974 00:34:39,679 --> 00:34:41,560 the actual cows that are out in the 975 00:34:41,560 --> 00:34:43,679 dairy um or it could be a term deposit 976 00:34:43,679 --> 00:34:45,480 to support like maybe you've got a good 977 00:34:45,480 --> 00:34:47,239 cash base but your accountants give you 978 00:34:47,239 --> 00:34:49,599 advice saying brow money in the business 979 00:34:49,599 --> 00:34:51,239 we can use a term deposit to support 980 00:34:51,239 --> 00:34:53,079 business lending and therefore you've 981 00:34:53,079 --> 00:34:55,000 got more of a some tax you add back in 982 00:34:55,000 --> 00:34:57,440 the business that's an option um but 983 00:34:57,440 --> 00:34:59,240 yeah when we say secured it generally 984 00:34:59,240 --> 00:35:00,480 does mean that we've got something 985 00:35:00,480 --> 00:35:02,560 tangible whether that might even just be 986 00:35:02,560 --> 00:35:04,839 water rights to an aggre property but it 987 00:35:04,839 --> 00:35:06,920 generally it is property to support it 988 00:35:06,920 --> 00:35:08,880 and then the other part is partially 989 00:35:08,880 --> 00:35:10,560 when we've got a little bit of unsecured 990 00:35:10,560 --> 00:35:15,160 or totally unsecured okay what about um 991 00:35:15,160 --> 00:35:17,480 gsa's corporate 992 00:35:17,480 --> 00:35:19,920 guarantees GSA standing for General 993 00:35:19,920 --> 00:35:22,400 Security agreement corporate guarantee 994 00:35:22,400 --> 00:35:24,079 it's a company guaranteeing as opposed 995 00:35:24,079 --> 00:35:26,079 to individual guarantees is this 996 00:35:26,079 --> 00:35:28,680 considered security to the bank so it's 997 00:35:28,680 --> 00:35:30,599 taken generally when there is a trading 998 00:35:30,599 --> 00:35:32,000 business in the background and we're 999 00:35:32,000 --> 00:35:33,599 using the income from the business to 1000 00:35:33,599 --> 00:35:35,640 help support the debt that's normally 1001 00:35:35,640 --> 00:35:37,280 where it comes like say if you are a 1002 00:35:37,280 --> 00:35:39,640 mechanic and you have your own property 1003 00:35:39,640 --> 00:35:42,240 and you trade from it then obviously the 1004 00:35:42,240 --> 00:35:43,960 commercial loan we've got is relying on 1005 00:35:43,960 --> 00:35:45,760 the trading business paying the rent or 1006 00:35:45,760 --> 00:35:47,359 paying it in the background generally 1007 00:35:47,359 --> 00:35:49,200 we'll consider taking a general security 1008 00:35:49,200 --> 00:35:51,040 agreement it just kind of says that hey 1009 00:35:51,040 --> 00:35:52,640 that business is liable for The Debs as 1010 00:35:52,640 --> 00:35:54,640 well so if something happens if there's 1011 00:35:54,640 --> 00:35:56,880 assets in there then we got to make sure 1012 00:35:56,880 --> 00:35:58,680 we get paid or the loan gets paid off 1013 00:35:58,680 --> 00:36:00,920 the back of it yeah yeah that makes 1014 00:36:00,920 --> 00:36:03,160 sense and that can restrict them if they 1015 00:36:03,160 --> 00:36:05,040 need to get working capital in the 1016 00:36:05,040 --> 00:36:07,720 future right so if they've got a GSA um 1017 00:36:07,720 --> 00:36:10,400 against their trading business to buy a 1018 00:36:10,400 --> 00:36:12,520 property and they go with a and z but 1019 00:36:12,520 --> 00:36:14,640 their business banking is with Westpac 1020 00:36:14,640 --> 00:36:17,359 for example and then Westpac you know 1021 00:36:17,359 --> 00:36:19,400 offer them an overdraft and say oh look 1022 00:36:19,400 --> 00:36:21,200 we can see all your money's coming in we 1023 00:36:21,200 --> 00:36:22,520 can give you half a million dollar 1024 00:36:22,520 --> 00:36:24,920 overdraft you just have to sign here and 1025 00:36:24,920 --> 00:36:26,240 then they do a search and say wait a 1026 00:36:26,240 --> 00:36:29,160 minute az's got a GSA over what happens 1027 00:36:29,160 --> 00:36:31,000 in that situation no it's okay it's Case 1028 00:36:31,000 --> 00:36:32,920 by case when it comes in this is why 1029 00:36:32,920 --> 00:36:34,800 it's judgmental so I'll give you a 1030 00:36:34,800 --> 00:36:36,599 little bit of General in the background 1031 00:36:36,599 --> 00:36:37,839 um because we'll look at each case 1032 00:36:37,839 --> 00:36:39,280 differently it doesn't mean that they're 1033 00:36:39,280 --> 00:36:41,079 limited it just means that when a 1034 00:36:41,079 --> 00:36:42,800 general security agreement is taken and 1035 00:36:42,800 --> 00:36:44,280 you're going to say like you said you're 1036 00:36:44,280 --> 00:36:46,359 West pack and asking for funds they will 1037 00:36:46,359 --> 00:36:48,839 email or send a requirement to A and Z 1038 00:36:48,839 --> 00:36:50,440 to see hey are you okay if we take 1039 00:36:50,440 --> 00:36:52,160 either a a second General Security 1040 00:36:52,160 --> 00:36:54,280 agreement or release this asset like 1041 00:36:54,280 --> 00:36:56,000 asset Finance generally we get a lot of 1042 00:36:56,000 --> 00:36:57,880 that release that asset from what we're 1043 00:36:57,880 --> 00:37:00,079 holding in security um and that's just 1044 00:37:00,079 --> 00:37:02,319 us reviewing saying hey is that client 1045 00:37:02,319 --> 00:37:05,319 taking out a lot of extra debt that we 1046 00:37:05,319 --> 00:37:07,800 should probably beware be aware of but 1047 00:37:07,800 --> 00:37:10,079 it is judgmental across the board okay 1048 00:37:10,079 --> 00:37:12,240 that makes sense so it's it's not like 1049 00:37:12,240 --> 00:37:14,280 the permanently stuck it's just about 1050 00:37:14,280 --> 00:37:16,280 having the right conversations and yeah 1051 00:37:16,280 --> 00:37:18,440 and generally not really required for 1052 00:37:18,440 --> 00:37:20,640 your property investors yeah it's for 1053 00:37:20,640 --> 00:37:22,720 your trading business portion yeah even 1054 00:37:22,720 --> 00:37:24,880 if the property investor is generating 1055 00:37:24,880 --> 00:37:27,280 income from a trading business 1056 00:37:27,280 --> 00:37:28,480 a lot of the time you're not going to 1057 00:37:28,480 --> 00:37:30,599 still do a GSA over it because the 1058 00:37:30,599 --> 00:37:32,640 predominant income is the is the rental 1059 00:37:32,640 --> 00:37:37,400 income is that right yeah um and if 1060 00:37:37,400 --> 00:37:41,280 someone was to want to access Equity 1061 00:37:41,280 --> 00:37:44,440 from a commercial property is that from 1062 00:37:44,440 --> 00:37:46,160 my experience it hasn't been as 1063 00:37:46,160 --> 00:37:47,800 straightforward which I find interesting 1064 00:37:47,800 --> 00:37:49,520 because people think oh it's unregulated 1065 00:37:49,520 --> 00:37:51,800 lending noncoded whatever it should be 1066 00:37:51,800 --> 00:37:53,880 easier but residential lending it seems 1067 00:37:53,880 --> 00:37:55,800 to be easier to access cash when you've 1068 00:37:55,800 --> 00:37:57,680 got Equity the value's gone up and 1069 00:37:57,680 --> 00:37:59,960 you'll Lear to Value ratio lvr is low 1070 00:37:59,960 --> 00:38:02,520 you can ask the bank to release say you 1071 00:38:02,520 --> 00:38:03,800 know half a million dollars and they'll 1072 00:38:03,800 --> 00:38:05,599 give it to you and you can use that for 1073 00:38:05,599 --> 00:38:07,760 investment if you have a commercial 1074 00:38:07,760 --> 00:38:09,040 property and that's gone up in value 1075 00:38:09,040 --> 00:38:11,160 your debt come down and you contact the 1076 00:38:11,160 --> 00:38:12,880 bank and say can I have half million 1077 00:38:12,880 --> 00:38:15,079 worth of cash where does that half 1078 00:38:15,079 --> 00:38:16,560 million come from for residential which 1079 00:38:16,560 --> 00:38:19,319 bank does that um look it generally just 1080 00:38:19,319 --> 00:38:20,720 asking the question 1081 00:38:20,720 --> 00:38:22,920 because it's perceivable sometimes in 1082 00:38:22,920 --> 00:38:24,319 the commercial space it's a little bit 1083 00:38:24,319 --> 00:38:25,720 riskier it's judgmental in the 1084 00:38:25,720 --> 00:38:27,280 background things can change a lot 1085 00:38:27,280 --> 00:38:28,960 quicker in like depending on your 1086 00:38:28,960 --> 00:38:30,760 industry so it's just understanding 1087 00:38:30,760 --> 00:38:32,760 where the money is going towards and you 1088 00:38:32,760 --> 00:38:34,560 have to do that for residential as well 1089 00:38:34,560 --> 00:38:36,040 you are actually giving the bank where 1090 00:38:36,040 --> 00:38:37,720 is that money going what's happening 1091 00:38:37,720 --> 00:38:39,839 with it but on Commercial side of it 1092 00:38:39,839 --> 00:38:41,040 because it has a little bit of extra 1093 00:38:41,040 --> 00:38:42,680 risk sometimes attached we just want to 1094 00:38:42,680 --> 00:38:44,160 know hey is it actually got a commercial 1095 00:38:44,160 --> 00:38:46,280 purpose to it or is it something you 1096 00:38:46,280 --> 00:38:47,520 should be putting through under 1097 00:38:47,520 --> 00:38:49,640 residential so you get sometimes the 1098 00:38:49,640 --> 00:38:51,040 protection under the consumer credit 1099 00:38:51,040 --> 00:38:52,839 code as well it's about understanding 1100 00:38:52,839 --> 00:38:54,960 what the money is going towards and 1101 00:38:54,960 --> 00:38:56,520 sometimes it might be you've already 1102 00:38:56,520 --> 00:38:59,000 spent it so you might have actually 1103 00:38:59,000 --> 00:39:01,480 opened up a cafe you've spent 300,000 to 1104 00:39:01,480 --> 00:39:03,400 fit out the cafe internally you've been 1105 00:39:03,400 --> 00:39:05,480 trading for 2 years then all of a sudden 1106 00:39:05,480 --> 00:39:07,520 now the business is trading well and you 1107 00:39:07,520 --> 00:39:09,440 want to pull out that extra the equity 1108 00:39:09,440 --> 00:39:12,200 you put in up front to open another one 1109 00:39:12,200 --> 00:39:13,640 so we might look and say yep we can see 1110 00:39:13,640 --> 00:39:14,640 on the balance sheet that you've 1111 00:39:14,640 --> 00:39:16,079 actually contributed this much to the 1112 00:39:16,079 --> 00:39:17,400 business now that the business is 1113 00:39:17,400 --> 00:39:19,240 trading well it's time to release some 1114 00:39:19,240 --> 00:39:20,960 of that Equity back because the business 1115 00:39:20,960 --> 00:39:22,560 can actually substantiate the debt that 1116 00:39:22,560 --> 00:39:24,480 is after and you might use that to open 1117 00:39:24,480 --> 00:39:26,119 up your next one so it's about 1118 00:39:26,119 --> 00:39:28,040 understanding what the money is for in 1119 00:39:28,040 --> 00:39:29,240 the background and it all becomes 1120 00:39:29,240 --> 00:39:30,760 judgmental in the background as I kept 1121 00:39:30,760 --> 00:39:33,119 mentioning yeah yeah I like that yeah 1122 00:39:33,119 --> 00:39:35,000 you will do things like reimbursing like 1123 00:39:35,000 --> 00:39:37,119 you mentioned so even with the lease 1124 00:39:37,119 --> 00:39:38,480 stock I've done that before where 1125 00:39:38,480 --> 00:39:40,319 someone you know they bought a 1126 00:39:40,319 --> 00:39:42,079 commercial property cash cuz they had 1127 00:39:42,079 --> 00:39:44,520 access to cash at the time it was 1128 00:39:44,520 --> 00:39:46,200 through Co and that time commercial 1129 00:39:46,200 --> 00:39:48,760 lending kind of stopped temporarily and 1130 00:39:48,760 --> 00:39:51,800 then they needed that money back um for 1131 00:39:51,800 --> 00:39:53,880 another investment but that commercial 1132 00:39:53,880 --> 00:39:55,280 property was paid off so they were able 1133 00:39:55,280 --> 00:39:57,000 to then release that money 1134 00:39:57,000 --> 00:40:00,440 was $2 million um as a Le stock Aline so 1135 00:40:00,440 --> 00:40:01,720 they rent service there and they gave 1136 00:40:01,720 --> 00:40:03,800 him 2 million to then use for whatever 1137 00:40:03,800 --> 00:40:05,280 they wanted to not necessarily what they 1138 00:40:05,280 --> 00:40:06,920 wanted to it was just kind of still had 1139 00:40:06,920 --> 00:40:09,800 to prove what it was for however because 1140 00:40:09,800 --> 00:40:11,640 they put money in they were able to take 1141 00:40:11,640 --> 00:40:14,839 money out essentially mhm yeah yeah yeah 1142 00:40:14,839 --> 00:40:18,000 cool um and that overlap was really the 1143 00:40:18,000 --> 00:40:20,200 the risk cuz I know with when it comes 1144 00:40:20,200 --> 00:40:23,119 to nccp and and non-coded commercial 1145 00:40:23,119 --> 00:40:25,880 lending the overlap risk is there so you 1146 00:40:25,880 --> 00:40:28,000 need to be clear that there a there's a 1147 00:40:28,000 --> 00:40:30,760 clear Line This is Commercial Business 1148 00:40:30,760 --> 00:40:33,760 purpose this is consumer uh you know 1149 00:40:33,760 --> 00:40:37,440 personal use essentially and if if you I 1150 00:40:37,440 --> 00:40:39,319 mean is it is it APPA that is a 1151 00:40:39,319 --> 00:40:41,000 regulator if they find out that you're 1152 00:40:41,000 --> 00:40:42,800 actually doing consumer lending and 1153 00:40:42,800 --> 00:40:44,440 putting under the commercial brand 1154 00:40:44,440 --> 00:40:45,880 you're at risk I think it's all under 1155 00:40:45,880 --> 00:40:47,640 the spotlight under the spotlight across 1156 00:40:47,640 --> 00:40:49,280 and it's gone through a lot of change 1157 00:40:49,280 --> 00:40:50,720 over obviously the last couple of years 1158 00:40:50,720 --> 00:40:52,480 around it with decision trees around 1159 00:40:52,480 --> 00:40:54,200 who's borrowing how much money and I 1160 00:40:54,200 --> 00:40:56,160 think it's constantly being reviewed but 1161 00:40:56,160 --> 00:40:57,760 yeah it's constantly kind of under the 1162 00:40:57,760 --> 00:40:59,520 spotlight making sure that you know if 1163 00:40:59,520 --> 00:41:01,119 you're borrowing under your individual 1164 00:41:01,119 --> 00:41:02,599 name under the consumer credit code that 1165 00:41:02,599 --> 00:41:04,680 you've got that protection for it and I 1166 00:41:04,680 --> 00:41:06,640 think you'll find a lot of the major 1167 00:41:06,640 --> 00:41:09,440 lenders in the non-consumer credit code 1168 00:41:09,440 --> 00:41:11,400 space still have this hate what is the 1169 00:41:11,400 --> 00:41:13,160 money going towards it's just prudent 1170 00:41:13,160 --> 00:41:15,280 lending and you know as mortgage brokers 1171 00:41:15,280 --> 00:41:16,319 yourselves you're asking the same 1172 00:41:16,319 --> 00:41:17,560 questions what are the funds going 1173 00:41:17,560 --> 00:41:19,520 towards um you don't want to be handing 1174 00:41:19,520 --> 00:41:21,040 out money when potentially they can't 1175 00:41:21,040 --> 00:41:23,319 afford it in the background but um yeah 1176 00:41:23,319 --> 00:41:24,880 it's just prudent 1177 00:41:24,880 --> 00:41:26,839 lending yep 1178 00:41:26,839 --> 00:41:30,040 um so just one more question before we 1179 00:41:30,040 --> 00:41:33,560 we wrap it up uh I think AZ is one of 1180 00:41:33,560 --> 00:41:36,920 the only banks that does startup funding 1181 00:41:36,920 --> 00:41:38,720 cuz I know I did some startup funding a 1182 00:41:38,720 --> 00:41:41,079 few years ago um 1183 00:41:41,079 --> 00:41:44,160 where I basically you know I prepared a 1184 00:41:44,160 --> 00:41:46,000 business plan and some forecasted 1185 00:41:46,000 --> 00:41:47,720 financials with the help of an 1186 00:41:47,720 --> 00:41:51,040 accountant and uh because I had property 1187 00:41:51,040 --> 00:41:53,839 that was a security so then A and Z was 1188 00:41:53,839 --> 00:41:57,240 able to approve the refinance of my 1189 00:41:57,240 --> 00:41:59,599 residential property so there was some 1190 00:41:59,599 --> 00:42:03,200 consumer lending in there as well as um 1191 00:42:03,200 --> 00:42:06,680 an overdraft which I used as startup 1192 00:42:06,680 --> 00:42:08,440 capital for my 1193 00:42:08,440 --> 00:42:11,680 business if you don't have property A&Z 1194 00:42:11,680 --> 00:42:13,640 can still do it but from my 1195 00:42:13,640 --> 00:42:16,200 understanding it's maximum 50% so say 1196 00:42:16,200 --> 00:42:17,760 you know it's going to cost you 300,000 1197 00:42:17,760 --> 00:42:20,599 to buy and fit out of business they'll 1198 00:42:20,599 --> 00:42:23,480 need to see you contribute 150,000 which 1199 00:42:23,480 --> 00:42:25,040 is your skin in the game and they'll 1200 00:42:25,040 --> 00:42:27,559 give you the 150,000 unsecured but it's 1201 00:42:27,559 --> 00:42:29,800 not guaranteed just cuz you do a 1202 00:42:29,800 --> 00:42:31,240 business plan just cuz you do forecast 1203 00:42:31,240 --> 00:42:32,720 it's still got to have some backing in 1204 00:42:32,720 --> 00:42:35,040 terms of your history and the industry 1205 00:42:35,040 --> 00:42:37,240 and um and how accurate it is like you 1206 00:42:37,240 --> 00:42:39,680 can't just say you know you're a I don't 1207 00:42:39,680 --> 00:42:43,119 know a cafe and your estimated forecast 1208 00:42:43,119 --> 00:42:45,839 a million dollar in the first year like 1209 00:42:45,839 --> 00:42:47,720 can you give us a little bit of um yeah 1210 00:42:47,720 --> 00:42:49,400 information on that um and I wish I 1211 00:42:49,400 --> 00:42:50,559 could say we're the only ones that 1212 00:42:50,559 --> 00:42:52,359 actually do the startup side of it but 1213 00:42:52,359 --> 00:42:54,280 we we're not we're not the only ones but 1214 00:42:54,280 --> 00:42:55,760 we have small business Specialists that 1215 00:42:55,760 --> 00:42:58,240 just do 0 to 300,000 which is where 1216 00:42:58,240 --> 00:42:59,800 sometimes a lot of that startup sits so 1217 00:42:59,800 --> 00:43:01,760 we've got a specialist area that kind of 1218 00:43:01,760 --> 00:43:03,720 is Branch based and they're there to 1219 00:43:03,720 --> 00:43:05,800 support customers to start up we also 1220 00:43:05,800 --> 00:43:07,440 have a lot of information online like 1221 00:43:07,440 --> 00:43:09,720 az.com if you go to institutional there 1222 00:43:09,720 --> 00:43:11,160 is business plans you can download 1223 00:43:11,160 --> 00:43:13,359 There's cashow forecast at any time and 1224 00:43:13,359 --> 00:43:15,000 it kind of shows you you know how to do 1225 00:43:15,000 --> 00:43:17,000 them and the questions and that you go 1226 00:43:17,000 --> 00:43:20,160 through um I like AZ this is why I've 1227 00:43:20,160 --> 00:43:22,000 come back and I work at ANZ again is 1228 00:43:22,000 --> 00:43:23,920 that um we kind of have that Spectrum 1229 00:43:23,920 --> 00:43:26,200 across the whole region small business 1230 00:43:26,200 --> 00:43:27,720 help people businesses start up and then 1231 00:43:27,720 --> 00:43:29,160 we move into the business bank and they 1232 00:43:29,160 --> 00:43:31,480 start growing and then they go into our 1233 00:43:31,480 --> 00:43:32,920 corporate area once they get to it 1234 00:43:32,920 --> 00:43:34,400 bigger past that I kind of like that we 1235 00:43:34,400 --> 00:43:35,720 look after everything across the 1236 00:43:35,720 --> 00:43:37,839 Spectrum and and we look after existing 1237 00:43:37,839 --> 00:43:39,920 customers as well we look at you know 1238 00:43:39,920 --> 00:43:41,119 sometimes the amount of money M through 1239 00:43:41,119 --> 00:43:42,359 their accounts which might make it 1240 00:43:42,359 --> 00:43:44,160 easier to apply for Lending later on as 1241 00:43:44,160 --> 00:43:47,079 well um but when you're coming for 1242 00:43:47,079 --> 00:43:48,720 startup funding there isn't a hard and 1243 00:43:48,720 --> 00:43:50,400 fast rule I keep saying in the 1244 00:43:50,400 --> 00:43:52,839 background judgmental in general like 1245 00:43:52,839 --> 00:43:54,040 say if you're wanting to start up a 1246 00:43:54,040 --> 00:43:56,720 business and the cost is 300,000 then 1247 00:43:56,720 --> 00:43:59,040 yeah we'd like to meet you halfway and I 1248 00:43:59,040 --> 00:44:00,640 think that's kind of realistic the fact 1249 00:44:00,640 --> 00:44:02,680 that if we're thinking unsecure funding 1250 00:44:02,680 --> 00:44:04,960 so we'd like a take on some of the risk 1251 00:44:04,960 --> 00:44:06,599 in the background U because you're 1252 00:44:06,599 --> 00:44:08,119 starting a new business you're not 1253 00:44:08,119 --> 00:44:09,559 purchasing an existing if you're 1254 00:44:09,559 --> 00:44:12,119 purchasing an existing business then 1255 00:44:12,119 --> 00:44:14,040 it's already earning income so you know 1256 00:44:14,040 --> 00:44:15,920 there's some validity in terms of the 1257 00:44:15,920 --> 00:44:17,839 amount of money that business is making 1258 00:44:17,839 --> 00:44:19,720 but if it's a full startup then yeah we 1259 00:44:19,720 --> 00:44:21,000 we'd rather meet halfway if you're 1260 00:44:21,000 --> 00:44:23,200 thinking unsecure um but that is in 1261 00:44:23,200 --> 00:44:24,720 general each deals looked at 1262 00:44:24,720 --> 00:44:26,680 individually uh if you got property to 1263 00:44:26,680 --> 00:44:28,640 support like you've done yourself then 1264 00:44:28,640 --> 00:44:30,119 you we can go that a little bit higher 1265 00:44:30,119 --> 00:44:31,880 or we'll consider a little bit higher in 1266 00:44:31,880 --> 00:44:34,400 the background but what plays a big part 1267 00:44:34,400 --> 00:44:37,520 is you know the four sees of credit Y 1268 00:44:37,520 --> 00:44:39,040 what character do you have have you been 1269 00:44:39,040 --> 00:44:41,760 in the industry it's I've had one when I 1270 00:44:41,760 --> 00:44:43,559 was a broker before where someone comes 1271 00:44:43,559 --> 00:44:45,640 oh I'd like to buy a clothing business 1272 00:44:45,640 --> 00:44:47,440 oh well have you worked in the industry 1273 00:44:47,440 --> 00:44:48,720 oh no I just love 1274 00:44:48,720 --> 00:44:51,760 clothes it's like okay well you know do 1275 00:44:51,760 --> 00:44:53,640 you understand work cover do you 1276 00:44:53,640 --> 00:44:56,440 understand super wages roster ing so 1277 00:44:56,440 --> 00:44:57,559 there's a lot of things that go into 1278 00:44:57,559 --> 00:44:59,520 running a business so if you're starting 1279 00:44:59,520 --> 00:45:01,520 up a new business A business plan is 1280 00:45:01,520 --> 00:45:02,839 going to show us what industry 1281 00:45:02,839 --> 00:45:05,079 experience you've had um do you know 1282 00:45:05,079 --> 00:45:07,000 have you worked in there as well do you 1283 00:45:07,000 --> 00:45:07,839 understand the business you're looking 1284 00:45:07,839 --> 00:45:10,040 at buying or how a runner and then a 1285 00:45:10,040 --> 00:45:12,319 cashow forecast yes we can put numbers 1286 00:45:12,319 --> 00:45:13,839 on a page and I think it's rare that I 1287 00:45:13,839 --> 00:45:15,240 see a cashow forecast that doesn't 1288 00:45:15,240 --> 00:45:17,760 service the debt um but what happens is 1289 00:45:17,760 --> 00:45:19,480 how did you come up with those numbers 1290 00:45:19,480 --> 00:45:20,640 like oh my turnover is going to be 1291 00:45:20,640 --> 00:45:22,599 10,000 a month okay well how you expect 1292 00:45:22,599 --> 00:45:25,040 to achieve that so A Cafe might be okay 1293 00:45:25,040 --> 00:45:26,440 we're going to turn the table was over 1294 00:45:26,440 --> 00:45:28,160 you know two or three times in one night 1295 00:45:28,160 --> 00:45:30,599 average spend per thing will be $36 per 1296 00:45:30,599 --> 00:45:32,920 client when they come in so it's kind of 1297 00:45:32,920 --> 00:45:34,880 validating the what you're giving us in 1298 00:45:34,880 --> 00:45:36,480 terms of the C forecaster and how much 1299 00:45:36,480 --> 00:45:38,599 you're going to earn yes we do look at a 1300 00:45:38,599 --> 00:45:40,599 little bit more for those new startups 1301 00:45:40,599 --> 00:45:42,599 we will look at it in depth if you're 1302 00:45:42,599 --> 00:45:44,440 thinking unsecured funding that you're 1303 00:45:44,440 --> 00:45:45,960 requesting in the background we'll have 1304 00:45:45,960 --> 00:45:47,440 a look and see what is your character 1305 00:45:47,440 --> 00:45:48,839 what's the contribution you're putting 1306 00:45:48,839 --> 00:45:51,480 in um you know capacity to service the 1307 00:45:51,480 --> 00:45:53,040 debt in the background we might limit 1308 00:45:53,040 --> 00:45:55,359 the loan term so we might shorten it to 1309 00:45:55,359 --> 00:45:57,040 reduce the risk so that you pay it off a 1310 00:45:57,040 --> 00:45:58,520 little bit quicker but we'll work with 1311 00:45:58,520 --> 00:45:59,880 you this is where the judgmental part of 1312 00:45:59,880 --> 00:46:01,599 it but we do look at startups I mean 1313 00:46:01,599 --> 00:46:03,720 everyone's got to start somewhere um but 1314 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 halfway 1316 00:46:09,000 --> 00:46:10,960 that would probably be a starting point 1317 00:46:10,960 --> 00:46:12,720 yeah yeah and just to put some context 1318 00:46:12,720 --> 00:46:14,920 when I did apply for I wasn't new to 1319 00:46:14,920 --> 00:46:16,520 Industry I'd been in the lending 1320 00:46:16,520 --> 00:46:17,880 industry and I'd been a broker working 1321 00:46:17,880 --> 00:46:20,400 for other companies before so when they 1322 00:46:20,400 --> 00:46:22,240 approved it they w't off we approved it 1323 00:46:22,240 --> 00:46:25,160 right you didn't yes yeah yeah if you 1324 00:46:25,160 --> 00:46:27,640 didn't I probably have you on the show 1325 00:46:27,640 --> 00:46:31,240 now so yeah it did it did help me um to 1326 00:46:31,240 --> 00:46:33,040 learn a lesson that I at the time I 1327 00:46:33,040 --> 00:46:35,359 wasn't ready for business cuz I used 1328 00:46:35,359 --> 00:46:36,880 that overdraft very quickly and I didn't 1329 00:46:36,880 --> 00:46:38,920 have enough clients to back it up um so 1330 00:46:38,920 --> 00:46:40,599 I had had to sell that property to clear 1331 00:46:40,599 --> 00:46:42,880 that debt uh and I reset which was 1332 00:46:42,880 --> 00:46:44,119 actually really good for me cuz I ended 1333 00:46:44,119 --> 00:46:45,720 up working for another broker I stayed 1334 00:46:45,720 --> 00:46:47,960 there for close to 5 years and I learned 1335 00:46:47,960 --> 00:46:51,319 a lot um and that's why G I've gone out 1336 00:46:51,319 --> 00:46:53,319 for a second attempt and so far so good 1337 00:46:53,319 --> 00:46:54,640 but you might be buying like a a 1338 00:46:54,640 --> 00:46:56,839 franchise like I say way then all of a 1339 00:46:56,839 --> 00:46:59,079 sudden we actually have an some sort of 1340 00:46:59,079 --> 00:47:00,960 agreement with the master franchise or 1341 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 the 1343 00:47:04,520 --> 00:47:06,000 judgmental part will Lear a little bit 1344 00:47:06,000 --> 00:47:08,160 more as well so it's just about reaching 1345 00:47:08,160 --> 00:47:09,359 out and giving an idea of what you're 1346 00:47:09,359 --> 00:47:11,200 looking at doing yeah that makes sense 1347 00:47:11,200 --> 00:47:13,160 because if it's ultimate a business is 1348 00:47:13,160 --> 00:47:16,280 as good as its um systems processes and 1349 00:47:16,280 --> 00:47:18,280 uh and the people so if you're if you're 1350 00:47:18,280 --> 00:47:19,960 buying into an established brand that 1351 00:47:19,960 --> 00:47:22,920 already has um customer attraction or 1352 00:47:22,920 --> 00:47:25,400 customer base and then also it's got its 1353 00:47:25,400 --> 00:47:27,599 system that you can follow then it 1354 00:47:27,599 --> 00:47:29,040 really just comes down to the character 1355 00:47:29,040 --> 00:47:31,800 of you and your ability to follow those 1356 00:47:31,800 --> 00:47:33,800 systems and have a you know good 1357 00:47:33,800 --> 00:47:36,319 character when it comes to um your 1358 00:47:36,319 --> 00:47:39,200 credit history as well right you said 1359 00:47:39,200 --> 00:47:42,720 the four C's so collat capacity uh 1360 00:47:42,720 --> 00:47:45,599 character collateral so the security put 1361 00:47:45,599 --> 00:47:47,319 what was the last one contribution and 1362 00:47:47,319 --> 00:47:48,960 contribution yeah yeah so what are you 1363 00:47:48,960 --> 00:47:50,359 actually putting in skin in the game 1364 00:47:50,359 --> 00:47:52,680 they call it yeah a lot of people they 1365 00:47:52,680 --> 00:47:54,400 want to you 1366 00:47:54,400 --> 00:47:57,680 know put no money in can use other 1367 00:47:57,680 --> 00:48:00,280 people's money and that's fair enough uh 1368 00:48:00,280 --> 00:48:01,559 it's very common in the property 1369 00:48:01,559 --> 00:48:04,200 development space um but that's just 1370 00:48:04,200 --> 00:48:05,760 yeah a lot more moving Parts I haven't 1371 00:48:05,760 --> 00:48:07,400 touched on on property development and I 1372 00:48:07,400 --> 00:48:10,280 probably won't in this episode um but 1373 00:48:10,280 --> 00:48:11,920 look I want to thank you for coming 1374 00:48:11,920 --> 00:48:14,200 today on the show you've been very um 1375 00:48:14,200 --> 00:48:16,040 insightful in terms of U what you've 1376 00:48:16,040 --> 00:48:18,720 shared today and uh you know for 1377 00:48:18,720 --> 00:48:20,640 customers out there or future customers 1378 00:48:20,640 --> 00:48:24,000 that want to learn more about what azed 1379 00:48:24,000 --> 00:48:26,200 does do in this commercial space before 1380 00:48:26,200 --> 00:48:28,800 they book a call with me because um I 1381 00:48:28,800 --> 00:48:30,480 think it's important to be you know 1382 00:48:30,480 --> 00:48:32,400 informed and prepared so that we're 1383 00:48:32,400 --> 00:48:33,800 having a bit more sophisticated 1384 00:48:33,800 --> 00:48:36,160 conversations um where can they find 1385 00:48:36,160 --> 00:48:38,079 that you mentioned earlier az.com there 1386 00:48:38,079 --> 00:48:40,400 was some other yeah if you go to az.com 1387 00:48:40,400 --> 00:48:41,920 if you obviously just go to the tabs at 1388 00:48:41,920 --> 00:48:43,640 the top under business it will tell you 1389 00:48:43,640 --> 00:48:44,920 the different products that we offer in 1390 00:48:44,920 --> 00:48:46,880 the background um but then if you go on 1391 00:48:46,880 --> 00:48:49,000 institutional as well then it obviously 1392 00:48:49,000 --> 00:48:51,559 gives you sometimes industry insights so 1393 00:48:51,559 --> 00:48:53,079 insights around different Industries as 1394 00:48:53,079 --> 00:48:54,960 well we bring out a papers every 3 1395 00:48:54,960 --> 00:48:57,040 months on that but also you can download 1396 00:48:57,040 --> 00:48:59,880 helpful guides like uh business plans 1397 00:48:59,880 --> 00:49:03,280 CASRO forecasts starting up trading so 1398 00:49:03,280 --> 00:49:04,680 kind of gives you a lot of online 1399 00:49:04,680 --> 00:49:07,359 content um if your starting or even 1400 00:49:07,359 --> 00:49:09,280 existing trading of how we might be able 1401 00:49:09,280 --> 00:49:11,920 to support as well awesome and if there 1402 00:49:11,920 --> 00:49:14,040 are any Brokers uh residential Brokers 1403 00:49:14,040 --> 00:49:16,200 that do listen to my podcast and they 1404 00:49:16,200 --> 00:49:18,280 want to you know tap into the commercial 1405 00:49:18,280 --> 00:49:20,520 space I recommend getting in touch with 1406 00:49:20,520 --> 00:49:23,799 Lee uh they can find you on on LinkedIn 1407 00:49:23,799 --> 00:49:25,680 uh but you do look after the Victoria 1408 00:49:25,680 --> 00:49:28,599 and Tasmania region more so right um but 1409 00:49:28,599 --> 00:49:30,079 even then I'm sure if they contacted you 1410 00:49:30,079 --> 00:49:31,720 you can re you know connect them to the 1411 00:49:31,720 --> 00:49:33,040 right person for their particular 1412 00:49:33,040 --> 00:49:34,839 aggregator group as well sometimes I'm 1413 00:49:34,839 --> 00:49:36,640 just the conduit to help connect you 1414 00:49:36,640 --> 00:49:38,920 with the right people because you know 1415 00:49:38,920 --> 00:49:40,480 like I said resi you do all the research 1416 00:49:40,480 --> 00:49:42,480 commercial a lot of it isn't online so 1417 00:49:42,480 --> 00:49:44,319 you just need to know who to call as 1418 00:49:44,319 --> 00:49:45,799 long as you know who to call I don't 1419 00:49:45,799 --> 00:49:48,079 expect you to remember the franchise 1420 00:49:48,079 --> 00:49:50,640 lvrs the property the types of security 1421 00:49:50,640 --> 00:49:51,680 you don't need to remember it that's 1422 00:49:51,680 --> 00:49:53,040 what the bankers are there for an 1423 00:49:53,040 --> 00:49:54,440 appetite will change everything we 1424 00:49:54,440 --> 00:49:56,440 talked about today in 6 month's time 1425 00:49:56,440 --> 00:49:58,799 might be different so this is where the 1426 00:49:58,799 --> 00:50:00,839 bankers are there to help so they'll 1427 00:50:00,839 --> 00:50:01,960 understand the appetite so you just need 1428 00:50:01,960 --> 00:50:03,839 to know who to call yep well I've got 1429 00:50:03,839 --> 00:50:06,119 you so I'll call you every time and in 6 1430 00:50:06,119 --> 00:50:07,760 months time I might have to back on in 1431 00:50:07,760 --> 00:50:09,160 case appetite 1432 00:50:09,160 --> 00:50:11,880 changes but yeah uh awesome well thanks 1433 00:50:11,880 --> 00:50:13,960 everyone for for listening today uh if 1434 00:50:13,960 --> 00:50:16,839 you do uh enjoy it uh please share it on 1435 00:50:16,839 --> 00:50:18,599 your socials please follow us and 1436 00:50:18,599 --> 00:50:20,680 subscribe and uh I'll see you on the 1437 00:50:20,680 --> 00:50:24,440 next episode thanks again Le thank 1438 00:50:24,440 --> 00:50:27,440 you 1439 00:50:28,380 --> 00:50:42,800 [Music] 1440 00:50:44,760 --> 00:50:47,760 a