REAL LIFE EXAMPLES
Australia bridging loans are useful when borrowers require liquidity to take advantage of an immediate opportunity.
Here are some popular ways in which Australia bridging loans can be used.
PROPERTY PURCHASE BY LOCAL BUYERS
Australia bridging loan helps retired couple purchase condominium while waiting to sell their luxury home
An elderly Australian couple wanted to downsize from their large home worth $5m to a condominium since their children are older and on their own. They wanted to wait for a higher selling price for their current house, but did not qualify for a bank loan for the new property given their advanced age and lack of employment.
The couple took a one-year $2.5m bridging loan against their existing home which was debt free, using the funds to purchase a new condominium unit in Sydney harbor area with cash. Six months later, they were able to sell their home at a higher price, using the proceeds to pay off the bridging loan.
GMG AUSTRALIA
BRIDGING LOAN
TERM
One Year
Property Collateral
Point Pier Luxury Home worth $5m
LOAN AMOUNT
$2.5m
LOAN-TO-VALUE
50%
EXIT STRATEGY
Sale of family house
KEY CONSIDERATION
Obtain financing without need to meet traditional bank loan requirements
PROPERTY PURCHASE BY FOREIGN BUYERS
International family office taps Australia bridging loan to purchase a commercial building before setting up in Melbourne
A well-known international family office identified a $46m commercial building in a prime Melbourne location. However, there were competitive offers and they would have lost the property if they waited for their more traditional funding source options.
The family office took out a $31.5m bridging loan against the value of the commercial property which allowed them to make a quick purchase. It took another six months before the client was able to secure traditional mortgage financing on the property. The bridging loan was then paid off after nine months.
GMG AUSTRALIA
BRIDGING LOAN
TERM
One Year
Property Collateral
CBD commercial building worth $45m
LOAN AMOUNT
$30m
LOAN-TO-VALUE
65%
EXIT STRATEGY
Incoming funds from overseas
KEY CONSIDERATION
Speed and certainty of funding
INVESTMENT OPPORTUNITY
Australian businessman uses a bridge loan to buy out business partner and expand business globally
Founder of a growth focused tech business needed funds urgently to buy-out his business partner with a first-right-of-refusal option. The goal was to use the funds from two of his properties to quickly buy out the partner and also purchase a small company abroad which will allow for international growth.
Client required a two tranche transaction with a tenure of 24 months. He was able to receive funds within one week to complete both transactions.
GMG AUSTRALIA
BRIDGING LOAN
TERM
24 Months
Property Collateral
Two high-end properties
1. Darling Harbour
2. City Centre
LOAN AMOUNT
$11m
LOAN-TO-VALUE
70%
EXIT STRATEGY
Upcoming company equity funding round
KEY CONSIDERATION
Speed of funding
BUSINESS EXPENSES
Australian developer uses a GMG Australia Bridging Loan to purchase land and funds for development
A local developer in Perth looking to acquire land below market value to develop track homes for resale.
The developer applied for a bridging loan against the land and future development.