Client’s situation

Partners Lending had an existing professional client that was looking to purchase their dream owner-occupied property. The client generated the majority of their income offshore which resulted in restricted lending options with mainstream lenders. Further to this, the clients’ recorded a previous year of higher than normal expenses, and the desired property was in regional Victoria which also limited their lending options.

How we helped

After reviewing all available options, Partners Lending suggested borrowing the funds through a Peer-to-Peer (P2P) lending arrangement, which allows an investor (seeking a return) to on-lend funds to a borrower directly through a set loan agreement.

Partners Lending established a 12-month loan facility using the funds of an existing client who was seeking a greater investment return. This structure allowed the purchaser to borrow 50% LVR against the residential property.

The P2P facility was turned around within a two-week timeframe, saving the client from delaying their settlement and potential costly extension costs.

The outcome

Entering into a Peer-to-Peer arrangement for 12 months allowed the client's accountant to rework financials to assist with the foreign income conversion, as well as decrease their monthly living expenses to a more satisfactory level for mainstream lenders.

At the 9-month mark of the Peer-to-Peer facility, Partners Lending started the refinance process to a major lender, to provide the client with a loan with reduced costs and a lower ongoing interest rate. At the 12-month mark, the client successfully refinanced their mortgage, with the investor receiving an investment return of around 10.5% based off interest rates at that time.

If you would like to know more about Peer 2 Peer Lending you can watch a short video with more detail here. If you have clients who are in need of short term funding or looking for alternative investment options, please get in touch with James Thompson, GM Lending on JThompson@pwg.com.au or 0437 940 065.

This information is general in nature and is provided by Partners Wealth Group. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.