Commercial Property Finance Lending Southport

Brokering a Commercial Property Loan

Case Study: $900,000 Owner-Occupied Commercial Office Purchase – Southport, Gold Coast

Overview

Mortar Finance was approached by a well-established residential building business seeking finance to purchase an owner-occupied commercial office property in Southport on the Gold Coast. The client required $900,000 in lending to secure the property and transition their operations into a dedicated office premises.

While the business was successful and financially stable, the deal presented a common challenge in commercial lending: the client’s company had a complicated shareholding structure, with multiple shareholders owning the business via separate Trusts. This created a key obstacle for standard bank policy, as many lenders require full guarantees from all shareholding entities, which the client wanted to avoid.

Mortar Finance worked strategically to structure the application, reduce perceived lender risk, and secure approval through a Big 4 bank, delivering a fast, clean outcome that met the client’s requirements.

Client Background

The client operated a thriving residential building business with a strong reputation and consistent turnover. Like many successful construction companies, the business had evolved over time, with shareholders brought in through a structured ownership model.

In this case, ownership was held via multiple Trusts, each with different beneficiaries and control arrangements. While this structure was effective from an accounting and asset protection standpoint, it can complicate finance applications, particularly when lenders request guarantees from every shareholding Trust.

The client’s goal was straightforward: purchase a commercial office property in Southport that would become their long-term headquarters. The property would be used to house administration staff, client meetings, project management functions, and operational planning.

Client Requirements

The client came to Mortar Finance with clear objectives:

• Secure $900,000 to finance the purchase of an owner-occupied commercial office property
• Ensure the finance structure is aligned with their business ownership model
• Avoid a loan structure requiring a guarantee from each shareholding Trust
• Obtain approval quickly to meet contract timeframes
• Keep repayments manageable, without placing unnecessary strain on cash flow

This was not a speculative investment or a lease-dependent purchase. The business intended to occupy the premises itself, which is often viewed favourably by banks. However, the ownership structure still needed to be carefully presented and managed.

The Challenge

From a lender’s perspective, this deal contained two key complexities:

1. Complicated Share Structure

The business had multiple shareholders, with ownership held via Trusts. Many banks treat this as a higher-risk profile due to:

• Complexity in determining control and liability
• Potential restrictions in the Trust deeds
• Multiple parties are involved in decision-making
• Additional documentation and legal review requirements

The client specifically required a structure that did not rely on guarantees from each Trust, which immediately narrowed the pool of suitable lenders.

2. Serviceability Under Commercial Assessment

Even though the business was performing well, commercial lenders can apply strict servicing calculations, especially for owner-occupied properties where rental income is not a factor.

Mortar Finance needed to demonstrate that the business could comfortably service the loan while maintaining operational stability, and do so in a way that reduced lender concerns around the reduced guarantee profile.

Mortar Finance’s Solution

Mortar Finance developed a solution that met the client’s needs while satisfying lender risk requirements.

After reviewing lender options and policy appetite, we placed the finance with ANZ, supported by a detailed and well-structured application that clearly explained:

• The purpose of the purchase
• The proposed ownership structure
• How the business would service the facility
• Why guarantees from each Trust were not required
• The strengths of the business and its cash flow history

Strengthening the Bank’s Risk Position

To ensure ANZ was comfortable with the structure, Mortar Finance identified and proactively addressed potential lender concerns.

We supported the application using the most recent 12 months of BAS to demonstrate serviceability. This approach provided a clear, current snapshot of business trading performance and helped streamline documentation.

We also included a key servicing adjustment:

• A recent $660,000 capital purchase had occurred in the trading period, which impacted the BAS figures.
• Mortar Finance highlighted this to the bank and included an add-back of the GST portion of that purchase to ensure the bank assessed the business on a true operating basis, rather than a distorted period affected by a one-off capital expense.

This small but important detail strengthened the serviceability position and reduced questions from credit assessors.

Facility Structure

To keep repayments manageable and support cash flow, Mortar Finance structured the facility over:

• A 5-year term
• With a 25% balloon at the end of the term

This structure reduced the ongoing monthly repayments and gave the client flexibility, while still fitting within ANZ’s credit parameters for owner-occupied commercial lending.

The balloon structure was particularly beneficial because the client’s priority was stability and predictable repayments, while maintaining the ability to reassess the facility in the future once the property had been held for a period.

Approval Process

Mortar Finance managed the approval process from start to finish with a strong focus on speed, clarity, and minimising the workload for the client.

Key steps included:

• Working closely with the client’s accountant to gather the required financial information
• Using the BAS pathway to reduce the need for extensive additional documentation
• Presenting a complete, well-explained submission to ANZ from day one

As a result:

• Approval was issued within 3 business days
• The lodgement process was smooth and efficient
• There were no major lender conditions that delayed progress
• The client was able to proceed confidently toward settlement

Outcome

Mortar Finance successfully secured:

• $900,000 funding for an owner-occupied commercial office purchase
• A structure that avoided guarantees from each shareholding Trust
• A repayment-friendly loan structure with a 5-year term and 25% balloon
• Fast approval within 3 business days
• Minimal documentation and a streamlined process for the client

Conclusion

This Southport commercial office purchase demonstrates the importance of strategic lender selection, strong application preparation, and structuring a facility that meets both client requirements and bank credit policy.

By understanding the client’s shareholding structure and proactively addressing risk concerns, Mortar Finance was able to secure a Big 4 bank approval quickly and efficiently, allowing the client to purchase and occupy a high-quality commercial office premises on the Gold Coast with confidence.

Contact Mortar Finance for any Commercial loan enquiries.