Guide for Borrowers

Guide for Borrowers

"Cleaner Loans, Better Results"

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We specialise in finding solutions for a variety of different business borrowing andproperty development scenarios. Our sweet spot is helping borrowers who can’tdemonstrate serviceability and therefore can’t access traditional bank finance.

About PMA

Why does PMA exist?

Established in 2014, Private Mortgages Australia Pty Ltd (PMA) is a 100% Australian ownedfinance company that exists to help borrowers that have been failed by traditional banksdue to bureaucratic inefficiencies and rigid lending criteria.

How does PMA do this?

The biggest difference between PMA and traditional banks is that we don't take intoconsideration a borrowers serviceability. This is because all of our loans come with acomponent of prepaid or capitalised interest. Our loan terms are generally 6-12 monthsand ideal for short-term commercial requirements. Our Credit Committee makes thelending decision on behalf of our pooled investment Fund and has over 50 yearscombined experience in private lending, credit and investment.

The biggest difference between PMA and traditional banks is that we agree on an exitstrategy with you (such as sale of property or refinance) and don't focus on a ridgidserviceability formula. This is because all of our loans come with a component of prepaidor capitalised interest so you don't need to make repayments during this time.

What does PMA do?

About PMA

Mortgage Manager: Private Mortgages Australia Pty Ltd Trustee/AFS Licensee: Primary Securities Ltd (AFSL# 224107)Lender of Record: Primary Securities Ltd ATF PMA Direct

The PMA difference

Low upfront assessment fees ($1,000 + GST)No charging clause in the Indicative Letter of OfferNo cancellation fees in the Indicative Letter of OfferValuation and QS fees at cost (and done at a reasonable value)Legal fees at costRebate unused interest on extension paymentsHigh level of repeat customersWin‐win approach to lending

Who does PMA help?

Business BorrowersBusiness owners that own real-estate and need to access equity quickly for genuinebusiness purposes but can’t demonstrate serviceability to standard ‘traditional lender’requirements.

Property InvestorsInvestors that have a real-estate portfolio and need to access equity to improve an existingproperty or purchase a new property. They don’t have liquid cash available and need ashort-term mortgage until they can complete a full refinance.

Property DevelopersNovice or intermediate property developers that are growing into a full-time propertydevelopers. They have lumpy cash-flow and can’t meet ‘traditional lender’ servicingrequirements.

Our Solutions

We have a solution for almost every business funding requirement. Below are thesolutions we’ve developed after years of helping businesses who are credit impaired, can’tget finance from traditional lenders or need urgent funding.

PROPERTY SOLUTIONS LVRS RATES P.A.

Urgent Settlement Saver Need to settle on an intending developmentsite or a property but a ‘traditional lender’ saidno? If you require a First Mortgage up to $3Mloan amount, then we can help.

Core Construction Need to construct a project but a ‘traditionallender’ said no? Are you building a commercialproperty or up to four residential units / lots? Ifyou require a First Mortgage up to $3M loanamount, then we can help.

Construction Support Need to construct a project but a ‘traditionallender’ won’t give you enough cash? Is the FirstMortgagee a ‘traditional lender’? Are youconstructing a commercial property or up tofour residential units / lots? If you require aSecond Mortgage up to $2M loan amount, thenwe can help.

Completion SupportNeed to construct a project but have a costoverrun? Are you building a commercialproperty or up to four residential units/lots? Isthe First Mortgagee a ‘traditional lender’? If yourequire a Second Mortgage up to $2M loanamount, then we can help.

Residual Stock Need to refinance a recently completed projectbut a ‘traditional lender’ won’t give you enoughcash? If you require a First Mortgage up to $10Mloan amount, then we can help.

‘as is’ up to 75% withimprovements‘as is’ up to 65% onvacant land

‘as if complete’ up to70%

‘as if complete’ up to70%

‘as if complete’ up to70%

‘as is’ up to 75%

From 6.95%

From 6.95% + 2% Line Fee

From 16.95%

From 16.95%

6.95% - 10.95%

Our Solutions Continued...

BUSINESS SOLUTIONS LVRS RATES P.A.

Equity Release – First Mortgage Need to quickly (re)finance a property to releasecash for a genuine business purpose but a‘traditional lender’ said no? If you require a FirstMortgage up to $10M loan amount, then wecan help.

Equity Release – Second Mortgage Need to quickly (re)finance a property to releasecash for a genuine business purpose but a‘traditional lender’ said no? If you require aSecond Mortgage up to $2M loan amount, thenwe can help.

Refinance/Debt Consolidation - First or SecondMortgageNeed to refinance or consolidate existingbusiness loan(s)? First & Second Mortgage loanamounts up to $10M and $2M respectively.

‘as is’ up to 75%

‘as is’ up to 75%

‘as is’ up to 75%

From 6.95%

From 12.95%

1st MortgagesFrom 6.95%

2nd MortgagesFrom 12.95%

No serviceability required, interest is prepaid or capitalised up to 12 months + extensions.Rates are LVR and postcode dependant. Pricing for major metro areas provided, all other postcodes considered on application.Settlement within 5 days of receipt of all outstanding information.

Fees & Charges

No cost until acceptance of our Indicative Letter of Offer (ILOO)On acceptance of our ILOO an Assessment Fee of $1,000 plus GST is payable.Valuation Fees: At cost, if requiredQuantity Surveyor fees: At cost, if requiredLegal Fees (incl. Disbursements) at cost, usually $3,300 to $4,400 (based on complexity)

$100,000 - $500,000

$500,001 - $1,000,000

Approval FeeLoan Amounts

3.50% (plus GST)

$1,000,001 - $2,000,000

3.00% (plus GST)

2.75% (plus GST)

$2,000,001 - $5,000,000

$5,000,001 - $10,000,000

2.00% (plus GST)

1.50% (plus GST)

Enquiry to Settlement Process

Our process is fast, efficient and there's no cost until acceptance of our Indicative Letter ofOffer, when an assessment fee is payable ($1,000 + GST) to cover costs for searches etc.

Submit application form Initial assessment

Indicative Letter of Offer

- Indicative rate- Assessment fee

Due diligence

Letter of offer Settlement

Training & Support

WebinarsPrivate Mortgages Australia hold regular educational webinars for borrowers. Learn thebasics of private mortgages, how the process works and who it is suitable for.

Support On-CallIf you need to discuss a scenario and see what your options are, our team are on hand tohelp. You can get in touch on 1300 856 683 or [email protected].

Case Studies

Case Study 1. Equity Release - First Mortgage

Scenario The Borrower has a background in propertyinvestment and is considered a sophisticatedinvestor.

The purpose of this loan was to provideurgent finance for an investment in thedevelopment of a retirement village locatedat Lake Macquarie in NSW. The mortgageewas about to foreclose and needed urgentequity release to keep the project alive.

Application for bank finance was submitted to NAB and was expected to be approved indue course, however the Borrower wished to proceed with works and was not prepared towait for bank approval.

PMA was able to turnaround funds in five days so that the investment in the developmentproject could continue.

The security property on offer was a residential unit in Bondi Beach with Owner EstimatedValue of $6m.

The Exit Strategy was to refinance with NAB project funding or should this be furtherdelayed then direct refinance of the security property.

DetailsSecurity Property Valuation: $6,000,000Loan Amount: $2,000,000 (1st mortgage)LVR: 33.33% Interest Rate: 9.75% p.a.Term: 3 months prepaid plus 3 monthly extensionsApproval Fee: 2.75% (plus GST)

They weren’t able to obtain bank finance as they were not able to meet traditional banks’servicing requirements.

Security on offer was a residential block with land area of 543sqm. The planneddevelopment included two townhouses each including four bedrooms, three bathroomsand two car spaces plus quality appliances, glazed windows, alarms and CCTV cameras.

The exit strategy was to sell the properties and extinguish the debt.

DetailsSecurity Property Valuation: $1,980,000Loan Amount: $1,386,000 (1st mortgage)LVR: 70% of 'as if complete' value (exc. GST)Interest Rate: 11.95% p.a.Term: 12 months prepaid plus 3 monthly extensionsApproval Fee: 2.75% (plus GST)

Case Studies

Case Study 2. Core Construction

Scenario The Borrower has a background in propertydevelopment and has completed severalprojects in Melbourne.

The Borrower had a previous loan with PrivateMortgages Australia for the acquisition of landwhich is now being refinanced for theconstruction of two townhouses in  Altona,Victoria.

Case Studies

Case Study 3. Urgent Refinance

Scenario The Borrower has a background inproperty investment and owns residential andcommercial properties in Mount Martha, GlenWaverley and Brighton East.

The purpose of this loan was to refinance froma major bank. They had all of their properties

mortgaged with the bank and cross-collateralised. This had started to cause issues as theyhad delays in accessing funds and lost out on securing properties they wished topurchase. They planned to slowly restructure their portfolio and removed a property inKew from the bank.

They were able to obtain bank finance however, they were  changing the title from twonames to one name and were looking for quick funds to help in the transition. The bankwas not able to fit within their time constraints.

The security on offer was a residential property in Kew, an inner suburb of Melbourne. Theproperty is on 921msq land, with three bedrooms and three bathrooms with living area of360msq.

The exit strategy was to refinance with a bank once the title has been changed from twonames to one.

DetailsSecurity Property Valuation: $2,700,000Loan Amount: $1,650,000 (1st mortgage)LVR: 61.6% 'as is' valueInterest Rate: 9.9% p.a.Term: 3 months prepaid plus 3 monthly extensionsApproval Fee: 2.75% (plus GST)

Testimonials

"Our sincerest gratitude to Peter, Shanta, Gerry and the team at Private MortgagesAustralia. Their financing solutions have enabled us and our business Kullcorp Precast tocontinue development of our world first Low Carbon Concrete (LCC) precast concretepanel business here in Moss Vale, NSW." Geoff Kull - Kullcorp Precast

“Private Mortgages Australia were able to offer me a loan solution which complementedmy property and individual circumstances perfectly. The professionalism of staff and thesimplicity of the process have been a breath of fresh air compared to other lenders. Iwould not hesitate using the PMA services in future and thoroughly recommend thiscompany to anyone looking for a quick but robust short term finance solution forbusiness investment.”Donna Cameron - Canberra

"Coming from a position where I thought a loan was impossible, PMA took stock of mysituation and could see that granting a loan was a safe undertaking. PMA worked withus in a clear, efficient and speedy manner to meet my loan requirement. The 8 weekbridging finance loan was repaid in 5 weeks and I am well under way with my next houseflip project. Thanks to PMA - I'll definitely be a return customer!"Rebekah Raymond - Cocoon Constructions

"I found the team at Private Mortgages Australia to be very efficient and responsive withorganising a loan process. Even when staff members were on leave, others stepped inand were across all aspects of the set up. We had a short amount of time to put togetherthe deal, and the team were able to get the job done, which prevented financial burden.The communications with myself and external parties was excellent in making the dealhappen."Luke Moroney - Property Investor, Sydney

“PMA were very detailed in requesting information from us in the first instance which wasannoying but in the end gave me the security in knowing all was in order and I was givena full understanding of my obligation. Importantly they had the flexibility to changeconditions to suit our particular circumstances even right at the end of the process. Iwould recommend them.”Paul Pitman - Pitman Properties

Address: Collins Street Tower, Level 3, 480 Collins Street, Melbourne, VIC, 3000Phone: 1300 856 683 Fax: 03 8692 6780Email: [email protected]: www.privatemortgagesaustralia.com.au

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