Gild Finance Market Update – February 2022

Looking through different finance options? You’re in luck! Here at Gild Finance, we’re all set for 2022 and are excited to tackle another busy year ahead.

Equipment Finance

  1. Construction
  • Low Doc heavy machinery up to 250k – No financials required for qualified borrowers.
  • ABN register within 2 years? No problem we have financiers who can finance for start ups as well.
  1. Tech and Startup
  • Need funding for your tech equipment? We can fund hardware and software.
  1. Music and entertainment
  • Looking to finance your music equipment? We can fund eligible equipment for qualified borrowers. AV equipment is a very popular asset that lenders can finance.
  1. Hospitality
  • Low Doc hospitality finance is available for qualified borrowers. Kitchen equipment, coffee machines and furniture can all be funded.

Commercial Finance

Would your business benefit from a unsecured line of credit? At Gild Finance, we have access to a lender who can provide your business with quick working capital funding which can be used for whatever your business needs. They can typically lend 1.5 times your monthly turnover.

Commercial Property

When purchasing an existing leased Commercial Property (example an Office or Shopping Centre) one of the key areas that you must consider is the Yield.

The Yield is a return measure over a set period of time, which can be simply calculated by dividing the Rent received p.a. by the value of the Commercial Property. Why is this important? In simple terms, it shows you your return on investment.

For example, John & Julie purchase a fully leased Office in Cremorne for $3,000,000. The property currently has 1 tenant who is paying $150,000 rent p.a. The property is fully leased.  Based on these figures the yield of the property is 5%.

Is this a good return? Well, in order to understand this, it is important to know what the market is doing. According to CBRE’s Q4 2021 figures, Victoria’s average Office Yield was 4.64%. To be more specific, Melbourne’s city fringe office market (which includes Cremorne, St Kilda Road & South bank), is demonstrating Yields between 4.88% – 5%.

In short, the yield that John & Julie would be receiving seems to be in-line with what the current market is showing for that area. Because the Yield is a function of rental return & valuation, John & Julie can have some comfort in knowing that the property they have purchased is comparative to the Market.

The Yield calculation can be used for all property related asset classes (Residential, Office Industrial, Retail etc.).

If you are looking at purchasing an existing Commercial Property that has an existing lease, feel free to reach out & we can assist in bringing you up to date with the latest market figures, intel & help you work your way through how your investment may compare to the market.

Residential Finance

Update from the Mortgage Team

As summer comes to a close, the housing market seems to continue to be strong. However, we are now seeing increases in fixed rates across the board. Variable rates, on the other hand, have continued to remain low with some still around the 1.99% mark.

At Gild credit we are still seeing the most pre approval applications we have ever had which suggests our customers are still very keen to get into the market. The next few months will surely tell us how much the increase in interest rates is actually having on the demand for property.

Guarantor Loans

As previously mentioned, we are experiencing a large amount of preapprovals as people get ready to make their purchase in 2022. Amidst all the applications, we are seeing a lot of first home buyers who are looking at ways to get into the market. One of the best ways young people can break their way into the market is to get some support from their parents in the way of a guarantor loan.

Many people are unaware of this, but banks can lend customers 105% of the purchase price with the support of a guarantor. This amount is paid at settlement, so the customer will still need to find the deposit, however it will be repaid back to them fully at settlement. Because of this we are seeing applicants borrow the 10% deposit off their parents, purchasing a property, and then getting all the funds to complete from the bank at settlement, then repaying their parents.

Guarantor loans are a very useful tool in allowing a young person to break into the market. However, there are of course risks to the guarantor with any loan, so before you look at doing this, please give us a call at Gild Credit to discuss, and we can walk you through the process and the pros and cons.

For any questions at all please contact finance team at 1300 843 453.