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Chapter 3

There are several different business structures you can have. It could be
a propriety limited company, a trust, or even a property trust. They are
generally the way to go. It is best to discuss this with your accountant,
but a good finance broker is able to point you in the right direction.
Most commercial properties will attract GST in the purchase price, but
there is also GST included in commercial rent, so you want to make sure
that your structure is going to give you the best tax advantage and asset
protection for the business. That is really important.

Whichever structure you choose will totally depend on your current
structure, your assets, your business, and that is probably more of an
accountant’s area of expertise. The bank generally prefers a propriety
limited company or a trust, but this is something you should definitely
discuss with an accountant.

Asset protection is more easily set up within a company, rather than in
your personal name. If things are set up in your personal name and you
do something wrong, it is easier to be sued and lose all your personal
assets. You need to make sure your assets are protected, personally and
in business.
When selecting your commercial investment team, you want to make
sure they understand the complexities of commercial and business loans.
Are they experts in commercial loans or do they mainly do residential?
A lot of residential brokers say they do commercial, but they don’t know
much about them and that is really, really important. Talk to a commercial
broker, not a residential broker that thinks that they know their stuff. I
have a commercial broker in my own business because I don’t think I
know enough about the commercial side to write commercial loans.

Make sure you get the right lender as well. Ask them what type of
businesses they finance? Do they have other requirements for the
business? What kind of merchant facilities, bank guarantees, equipment
finance is available?

Not all lenders will finance all types of businesses. To get help developing
a long term strategy, work with a commercial broker who understands

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