Motion – A Standby Loan Facility from Lannock Strata Finance
That the Owners Corporation resolve that the Executive Committee and or the Strata Manager be authorised to enter the corporation into; affix the common seal to execute; and, when required, utilise a Standby Loan Facility with Lannock Capital 2 Pty Limited (ACN 153 391 283) to meet working capital shortfalls up to the amount of the Owners Corporation’s annual levies.
This motion provides the Owners Corporation with backup financing to ensure sufficient funds are available to meet expenditure if there are levies in arrears, unanticipated expenses or there is a need to smooth cash flows.
The benefits of this Standby Loan Facility with Lannock Strata Finance are:
a) The Owners Corporation will not incur any costs (e.g. fees or interest) if the facility is not used (standard rates and charges apply if it is used);
b) Funds may be borrowed for terms up to 2 years but can be repaid at any time on a monthly basis without penalty provided payment is received on a specific date in any particular month;
c) As with all Lannock Strata loans, this standby facility is unsecured – there are no mortgages, no liens, no charges, no caveats, no personal guarantees, there is nothing registered on the title of the common property or an individual lot; and
d) Lannock warrants that the interest rate for this standby facility will always be less than the rate that the corporation could if it wished charge to lot owners with levies in arrears – this means the Owners Corporation need never be out-of-pocket when funds are used to cover levies in arrears.
Notes for Strata Managers and Executive Committees
This is the motion that should be on the agenda of every general meeting of every strata corporation. Please refer to the Standby Loan Facility Fact Sheet for more information available at lannock.com.au.
It is purely a backup – it means funds are readily available should the corporation need them and it costs the corporation nothing if they don’t use it.
Funds can be used for any working capital purpose: bridging finance for levies in arrears; as an overdraft to tide the corporation over til the next round of levies is due; to smooth lumpy cash flows such as paying insurance premiums; and to cover unexpected expenses.
When the Owners Corporation wants to use the facility, simply contact us with the name, number and address of the corporation and the amount of their annual levies – we’ll do the rest.
After the documents have been signed, there is a four day turnaround time for funding – if we have all the necessary documentation by close of business on a Friday, the corporation will usually have the required funds on the following Thursday.
Each drawing under this facility has an automatic 2 year term with interest debited from the corporation’s account each month. When the corporation wishes to repay the loan, just send us an email with 5 days’ notice and the principal and final interest will be debited on the day of the next monthly payment.