Borrowing is an effective way of funding a strata corporation's repairs, maintenance & improvements, which can maximise the value of the building & investment. Borrowing makes it possible to perform any necessary maintenance or desired improvements to the building, without the need for special unit holder levies, enabling you to invest now.

Borrowing can improve your Return on Investment (ROI), by providing financial leverage which can increase returns. There is no need to stage works, reducing inconvenience & costs. Whether you're an owner occupier or investor, your lifestyle is improved as a result. An investor also enjoys the benefits of increasing rental returns and / or tenancy stability.

Borrowing has the potential to increase returns, lifestyle, rental yields and sale prices increasing overall wealth. Cash flow is also freed up from the obligations of inefficient sinking funds and onerous special levies.

Sinking Funds have a way of costing you money, due to inflation, increased scope of works, tax on returns, and the opportunity cost of better utilising funds elsewhere. Special Levies can also often be a problem, as unit holders suddenly have to find & pay a lump sum of money, which all unit holders may not have available at the time.

By comparison, borrowing may be cheaper in many cases, as it gives you the freedom to get the works done now - optimising the timing and extent of the project, while also reducing the costs that come with staging works. You only pay for what you use, when you use it - so you can budget your repayments in an orderly, financially efficient way

Borrowing is quick* - funds can be available within a week of a General Meeting and lodgment of loan documents. This is a significant improvement on the years that it takes for cash to accumulate in a sinking fund or the months you need to wait for everyone to pay a special levy.

Waiting is frustrating - it makes scheduling the works or resolving any issue difficult. Additionally, both services and the problem itself get costlier as time goes on.

Body Corp can choose to borrow the entire amount, or just a part of what’s required, with the balance of funding coming from existing Sinking Funds or Special Levies. Borrowing gives you a speedier solution for your building's problems. Plus there's the added certainty of only using what you need, when you need it, with regular payments spread across a term of your choosing, generally up to 5 or 10 years.

Benefits summary:

For unit holders:

  • Maximises value - resale values and rental incomes are enhanced along with resident satisfaction
  • Reduces financial dependence - existing owners can fund capital works without paying special levies
  • Payment options - can be tailored to suit most financial positions and levy cycles for up to 5 or even 10 years with fixed or variable rates.
  • Funds available quickly* - capital works are not delayed while special levies are collected
  • No security - There is no mortgage or charge over owners assets
  • Limited Fees - Once established there are no ongoing fees or lump sum payment penalties.
  • Savings - Time and money may be saved by allowing works to be carried out quickly with upfront funding (rather than stretched out over a period of time over several stages).

For Strata Managers

  • Client relations enhanced - Unit holders will appreciate you informing them of a manageable, alternative funding solution to works required outside of requiring a special levy.
  • Loans specialist - Our loan specialist will organise the funding so the process is as simple & as seamless as possible.
  • Urgent repairs - Urgent repairs can be carried out immediately without the need to raise special levies and the problems this can cause legally & with unit holders.

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