During this upcoming period of uncertainty, we anticipate many owners will experience difficulty in getting personal finance or increasing their mortgage. And everyone is worried that levy arrears will increase.
That is why we have created an easy and simple “levy assist” working capital loan to cater for owner corporations experiencing increased arrears.
To learn more about this product, and answer any questions you may have, we’ve compiled the following FAQs. You can also call us on 1300 851 585 or email strata@lannock.com.au and a member of our team can further assist you.
Who is this loan for?
Any owners corporation, body corporate, strata corporation or strata company in Australia (sorry, not Tasmania yet) which is concerned that the coronavirus might mean that some of their owners may have difficulty in paying their levies.
What can we use if for?
The owners corporation can use our funds to pay any expense that you would normally pay but can’t because of levies being delayed.
How much can we ask for?
As much as you need. We suggest you set the limit at the same amount as your annual budget or the amount of levies you intended to raise over the next 12 months. But more or less is ok, it’s your choice.
What is the term of the loan?
In total, 48 months. The first 12 months are interest-only then it automatically flips into principal and interest over the next 36 months. Payments are monthly with a direct debit on the corporation’s bank account. If you find the P&I repayments are too much, we’ll extend the term which reduces the monthly payments.
How do we draw the funds?
You can draw funds as and when you need them. Each “drawing” or “advance” is 25% of the facility amount. For example, if your chosen amount of credit is $60,000, each drawing will be for $15,000. Each advance is in effect a separate loan.
How long will funds be available for?
Typically, you will have a 12-month availability period but this can be extended on request.
Can we pay it back early? What is the penalty?
You can pay it back whenever you like. There is no fee for paying back early. Just send us an email and on the next payment date we’ll debit your account for the full amount of the balance of the Specified advance. There is one restriction – Advances (or drawing) can be repaid separately but each Advance must be repaid in full.
What’s your security? Do we have to give a mortgage?
Lannock Levy Assist is an unsecured loan – there are no mortgage, liens, charges, caveats, etc. It’s purely a contract for the supply and repayment of money between Lannock and the owner corporation. Owners do not have to give personal guarantees and we don’t as for personal financial information from owners.
What is the interest rate?
Currently 8.0%. It’s a variable rate which will change with market and economic conditions.
Can we get a fixed rate?
No. This loan is only available at a variable rate.
What are the fees?
None. We’ve waived our approval fees and we won’t charge any monthly fees or settlement fees or the like. We won’t charge you any dishonour fees or penalty interest if the loan is in arrears.
Is this available for owners?
No. Only for Owner Corporations.
What happens if we set this up and never use it?
Nothing. There are no fees so you won’t be charged a thing. You only pay for what you use, when (or if) you use it.
What are the next steps?
- Contact us for a Loan Proposal – email strata@lannock.com.au
- When you’re ready to go ahead, ask us for a Loan Contract
- Send out a notice for a general meeting and include the resolutions for the loan in notice
- Hold a general meeting
- Execute the loan contract and send it back to us
