We recently assisted a self-employed client who sold their successful business and was having difficulty restructuring his business loan. His existing lender had set up a loan that was used to purchase a property prior to the sale of the business. However, the bank had cornered him without him knowing and set up the loan incorrectly. He was paying a very high rate and paying the loan back over a small term.
When the client approached the bank and advised that his business was now sold, and asked the bank to restructure his loan as his income wasn’t what it once was, he was told that they could do little to help.
Since the client’s loan was set up as a business loan, the task wasn’t a simple refinance. When lenders see business and or commercial loans, they like to charge higher interest rates to make it difficult to restructure this type of debt. We had to find a lender that would utilise his equity in his own home and let the client restructure in a smart way to be able to make the repayments and still pay the loan off.
Utilising our wide network of lenders, we were able to shortlist lenders that were happy to take on the structure of the loan, whilst also offering him flexibility with the loan. They did not want the loan to be short-term nor did they want it to be a high interest rate loan.
Out of the four lenders we shortlisted, two had interest rates over 4% and two had interest rates under 4%. We compared the products available, along with the flexibility of the loans and we were able to receive approval with the lender that saved the client the most amount of money on an annual basis. With the new lenders we shortlisted, we saved the client $20,000 over 10 years and from the previous lender we were able to save an astonishing $68,000 over the next 5 years.
If you or someone you know is looking for assistance with a loan and wants a broker who will go above and beyond for their client, speak to one of our Launch Finance brokers today.