Nick Lowe and William Hamer, joint directors at LH Financial Group, recall how they negotiated an ambitious and complex deal for an entrepreneur
The Scenario
We were approached in November of last year by a property developer and entrepreneur who was looking to diversify his business interests. He was a new client of LH Financial Group and he had a new business plan: instead of staying in propertyrelated fields, he wanted to branch out into hospitality and take over the freehold lease on as many as four existing businesses.
All were well-known venues but needed some work to restore them to their full potential. A loan was required to cover the renovation and premises refit, as well as to fund overheads like marketing and payroll.
We had a month to complete the deal. However, due to the complex structuring this was a challenging time frame. Not only did the deal fall outside of normal credit policy but there were five development companies being used as guarantors, and the client had a limited trading history in hospitality of only four months.
The Solution
We knew that, due to the complexity and nature of the deal, the major lenders would not touch this application – it was too complicated, there was no security, and the client just didn’t have the industry track record needed to mitigate the risk of such a huge project.
We needed a specialist business lender that was receptive to non-vanilla deals, supportive of small businesses, and understanding of those who wanted to build a diversified portfolio of interests. Further, we needed a lender that could be flexible enough to design a custom solution that was suitable for meeting the client’s current needs as well as their future objectives.
We had worked with online lender Moula many times before, although the client had not yet. We knew this sort of deal could be workshopped with a Moula BDM to reach a good outcome for all concerned. So we turned to Moula BDM Chris Evans.
Although the lender was a relatively young brand in the marketplace, the client was happy with this course of action due to Moula’s growing reputation and its backing by Australia’s largest non-bank lender, Liberty Financial.
Chris and the Moula team took time to develop a bespoke approach that accounted for the nuances of this specific transaction.
Their solution included a $100,000 loan for the renovations and refit, a $50,000 overdraft, and an ongoing line of credit to cover OPEX. The workshopping took a couple of weeks, then from the time we submitted the application, things moved very quickly and the funds were on their way to the client in no time.
The Takeaway
Drawing on our day-to-day experience of working with business owners, we knew we needed a lender that was agile and responsive to the needs of an ambitious business. We also needed a lender that would be receptive to creating a bespoke deal capable of supporting long-term growth and achieving the client’s ROI target – that knowledge certainly paid off this time. Our relationship with Chris also helped.
His ‘above and beyond’ attitude was certainly a game changer on this occasion; he is always ready to try to find the right solution for our clients, and as a BDM he has always been supportive of the deals our clients require.
This wasn’t a simple deal, and making it work took a lot of effort; however, Chris and the Moula team were incredibly supportive and full of bright ideas as to how we could leverage what was needed against what was available. Working with the Moula team, we created the most effective solution possible, putting our client on track to hit his ROI target.
To say the client was thrilled is an understatement. This deal wasn’t straightforward, but with our combined expertise and professionalism it was well handled and, as a result, all of the client’s businesses have been strengthened and their risk profile greatly improved. For any brokers who are stuck on a complicated deal, I would fully recommend talking to Moula – or another similarly agile, tech-driven and receptive lender – and work closely with your BDM.
Nick Lowe
Joint director
LH Financial Group
Will Hamer
Joint director
LH Financial Group
