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Before BCBS is able to approve a loan we would need to make sure of a few things. Although this page doesn’t include the comprehensive list, it does describe the main aspects we’d need to be comfortable with. The sort of things we check are:
- What do you need the loan for?
- Have the members been given the opportunity to pay what they can towards the necessary expenses first, before a loan is sought as a solution? Although our loans are much cheaper than many other forms of debt (like credit cards for example), they’re still not cheap. We want to ensure that the members are not lumbered with this interest cost if they have other sources of capital (such as - savings, facility on their home loan, etc) available to them. We won’t lend therefore unless the body corporate has levied the members for the expenses they need to incur, and given the members a chance to pay this levy.
- We need to ensure the value of the property meets our loan to value criteria. That doesn’t mean we only lend to high value developments, it just means we need to assess the value of the development seeking assistance and then ensure the loan is appropriate in relation to that value.
- We want to ensure the members have approved the loan. Even though the trustees of the body corporate are empowered to sign the loan agreement on behalf of the members, we require the members be given the chance to decide if they need the loan or not. In some cases the trustees have been replaced by a high court appointed administrator. If that’s the case then we want to ensure that the administrator approves the loan.
- Then there are various administrative details we need to check. These include ensuring the insurance on the property is up to date, that you have a managing agent, that we’ve seen the audited accounts and so on.
The good news is that even though this looks like a lot of work, we’ve done this many times before and the approval period is usually quite short with payment to you a few days thereafter.
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