Page 72 - Smart Money

Smart Money

The structure is the most important thing when it comes to
commercial lending. And the reason it is different is because we

need to maximise your tax benefits for your asset protection.

So where do you get good advice?

You need to talk to a commercial property agent who actually knows their
stuff because commercial properties are generally zoned for different
usages. A commercial property could be zoned for industrial use, or it
could be for office space. If you buy a property you intend to use for
your business and you are a mortgage broker, if it is zoned industrial, you
won’t be able to have an office in that property. You need to make sure
that the commercial agent gives you the right information so that you
know the property is correctly zoned for the business.

When buying commercial property, your team of experts will also differ.
You need a commercial mortgage broker who knows a little bit about
accounting and tax, and a broker who can work with your accountant to
make sure that the finance is structured correctly for acceptance by the
bank. Your accountant may suggest a certain set up and a good broker will
make sure that that structure is going to suit the bank.

For example, if your company has a trust set up and you want to buy that
property through your trust, you need to make sure that the bank will
actually finance the property through the trust. They might want it in a
personal name or in a company name, not a trust.

So if you talk to a good commercial mortgage broker, she or he will know
the ins and outs of the lenders and make sure that when the accountant
sets up the company, it is in the correct entity.

Anyone can buy commercial property, and it is easier if you are not
using it for your own business. If you are employed as a PAYG tax payer,
earning a normal nine-to-five income, and buying a commercial property
as an investment, that actually covers the income side of it. But if you
are starting up a new business and don’t have an income and you want
to buy a business or a property, then you could fall into some difficulty

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