Can I Secure a Loan for a Factory Purchase? If you’re eyeing a factory in Australia, there are financing options available. A strong business plan is key when applying for a factory loan. 

Loan Details: 

• Borrow up to 80% of the factory property value. 
• 100% financing using residential property equity. 
• Maximum loan term: 20 years. 
• Interest-only term: 5 years. 
• Loans over $5,000,000 assessed case by case. 

Valuation Insights: 

• Industrial property valued differently than residential. 
• Location crucial for attracting buyers in default scenarios. 
• Considerations include zoning changes and adaptability. 

Specialty Factories: 

• Specialized factories need careful consideration. 
• Location and industry strength affect Loan-to-Value Ratio (LVR). 

Loan Application Assessment: 

• Commercial lenders assess income against proposed interest. 
• Strong income and assets can mitigate bad credit. 
• Business owners need financial statements, BAS, and a business plan. 

Security Options: 

• Registered first mortgage on property. 
• General Security Agreement over investor’s rights. 
• Directors’/shareholders’ guarantee. 

Reasons for Sale: 

• Investigate reasons behind a factory sale. 
• For tenanted factories, analyze business bank statements. 
• Untenanted factories may indicate issues; check vacancy rates. 

Choosing a Good Factory: 

• Factors: Land space, truck access, clearance height, doors. 
• Loading dock and security features desirable. 
• Office space, engineering certificate, and location matter. 

Economic Trends: 

• Australia’s shift from manufacturing to services and mining. 
• Gentrifying areas may offer investment opportunities. 

High-Tech Tenants: 

• Demand for electronics and high-tech production. 
• Proximity to skilled labor more crucial than transportation. 

Freehold Purchase Considerations: 

• Control over renovations and fixed costs are advantages. 
• Consider ongoing maintenance costs and growth barriers. 

Types of Factories: 

• Discrete products, continuous production, boutique manufacturing. 

Tax Benefits: 

• GST applies, but investors can claim it back. 
• Consult an accountant for tax-related decisions. 

Lease Considerations: 

• A specialist solicitor helps review lease terms. 
• Clarify responsibility for ongoing expenses and property changes. 

Zoning Matters: 

• Industrial zoning varies; check local council regulations. 

Professional Advice: 

• Seek financial and legal advice before factory investment. 
• Initial consultations with professionals are usually free. 

Structural Considerations: 

• Accountants can help set up a profitable entity structure. 
• Specialist solicitors ensure favorable sale contracts. 
• Business brokers can negotiate on behalf of buyers.