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Podcast | Obtaining finance for your practice and structuring your loans

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Lending Consultant Kimsor Pan, does a deep dive into the lending world, providing insight into the process of obtaining finance for your practice, structuring your loans and choosing a lender. Kimsor has strong experience and knowledge in dealing with complex consumer lending as well as business lending. He believes that by having a holistic conversation with clients, they can receive appropriate advice and recommendations on buying their first home, investment property, or business property, while also finding ways to structure loans to benefit their financial position.

This podcast will provide answers on the following:

  • How to apply for a business loan.
  • The key factors to consider when choosing a lender.
  • How long the process can take.
  • The importance of getting the structure right from the beginning.
  • How your business loan may impact or change the way you structure and manage your home loan or property loans.
  • Steps in refinancing a loan.

If you have more questions or wish to talk to one of our Lending Consultants about the process of obtaining finance for your practice and structuring your loans, click here to book a no-obligation free initial consultation.

We do hope you enjoy this podcast but please remember that the information discussed here is of a general nature and is not intended to serve as advice. The views and opinions expressed in this podcast are those of DPM, not PodMD. This information has been provided by DPM Lending Pty Ltd ACL number 374850 and is general in nature so it may not be right for your personal circumstances. DPM Financial Services recommends you obtain advice concerning specific matters before making a decision.

PodMD
The financial journey of a doctor is unique and complex. DPM Financial Services is a specialist medical finance advice firm that aims to educate doctors of Australia to make the right financial decisions and achieve their financial goals. DPM Financial Services is all about you getting the right advice that suits your personal and professional needs and making sure you have confidence in your financial future. Today, I’d like to welcome to the podium PodMD Studio. Kimsor Pan from DPM joined DPM in 2019, bringing more than seven years industry experience having previously worked for Bank of Melbourne, Kimsor has strong experience and knowledge dealing with complex consumer lending to business lending. By having a holistic conversation with clients Kimsor can provide advice and recommendations on buying your first home investment properties and ways to structure loans to benefit clients financial position. We do hope you enjoy this podcast but please remember that the information discussed here is of a general nature and is not intended to serve as advice. The views and opinions expressed in this podcast are those of DPM not not him do this information has been provided by DPM lending Australia credit license 374850 and is generally nature so may not be right for your personal circumstances. DPM, financial services recommend you obtain advice concerning specific matters before making a decision. Kimsor thanks for talking with us on podium day to day.

Kimsor
Yep, thank you for having me.

PodMD
The topic of today’s discussion is obtaining finance for your practice and structuring your loans. Kimsor can you please explain to us really quickly? What is the process for applying for a business loan? And how does this differ from a home loan application?

Kimsor
Yep, so a residential loan is a regulated loan which is covered by the National Consumer Credit Protection or the NCCP act. These require lenders brokers to make sure that a borrower can repay a loan without significant hardship. On the other hand, NCCP actually does not apply to a business loan, there is news for business purposes. This does make a lot of difference when applying for business loan as the process in preparing for a bank submission is similar compared to a home loan application. And depending on the complexity of the borrower, the timing or to approval can also be achieved faster as well as brokers we will you’ll need to understand the borrower’s requirements and objectives and ensure responsible lending is adhere to just to ensure we make a recommendation that suits borrowers needs.

PodMD
So, what are the key factors to consider when choosing a lender?

Kimsor
This is really going back to what the client’s requirements and objectives are. The best part being a broker is that we have access to various lenders so we can review each lenders offering before making a recommendation to our clients. This way clients can have all the information at hand to review before making an informed decision. All these factors would include but not limited to interest rate, so whether it be fixed or variable, and the loan term itself, some lenders can offer longer loan term hence lower repayments for our clients, their repayment type, whether it’s principal and interest or interest only repayment, I found that majority of our clients opt for interest only just for tax purposes and cash flow. For me though, the most important part is the bank security, whether if a property or home can be offered to the bank as a security. This way, the bank can actually provide a long longer loan term for clients a lower interest rate and the flexibility to make interest only repayment instead of principal and interest. Other factors include fees and charges that needs to be considered before when choosing a lender.

PodMD
And how long does this process usually take?

Kimsor
It really depends on which lender we proceed with at a time of application. To be honest, I’ve completed our business facility line of credit with a lender recently that takes 48 hours other lenders business facility could range between three to six weeks. It’s really depending on the credit queue.

PodMD
Kimsor can you tell us why it’s so important to get the structure right from the beginning?

Kimsor
Yeah, that’s a good question. Actually. Setting up the right structure from the beginning is very important in helping our clients maximize their tax-deductible position, their equity position, it can save on the interest rate itself, it can improve the cash flow and help pay down the debt more effectively and efficiently. It also provides a great foundation to build an expanded lending needs, not just for now, but also for future lending requirements. That’s why as a lending consultant, we work closely with DPM accountant to ensure we set up the correct loan structure from the start to align with the client’s financial goals.

PodMD
So how might your business loan impact or change the way you structure slash manage your home loan or property loans?

Kimsor
A businessman can actually impact on service ability or borrowing capacity for home loan or property loans. For example, claim may consider setting up a business loan and trust with a corporate trustee, say they want to purchase shares in a medical practice for example, instead of having it under their own individual name. This may be done for tax reasons. But more importantly, from a lending point of view, it may impact on how much they can borrow for their home or for their investment loan. DPM can help in setting up lending product news for tax deductible purposes, which offer competitive rates compared to a business loan. This arrangement uses the equity on the existing properties. And clients can adjust or rebalance the limits of the home loan, which is the non deductible debt and extend the business facility which is a tax-deductible facility.

PodMD
So, if a client’s looking to refinance or restructure a business loan, what are the key steps to take?

Kimsor
The first step is to understand the objective of the business loan and then review the current loan structure to see if it’s working well for you. You may want to lower interest rate or start paying down the principal or possibly extending the loan term and interest only repayment. These needs will dictate the proposed refinance or the restructure of a business loan. For me the best way to however is to review not just the business loan but the overall lending including any home loan or personal loan or investment loan, you need to understand the full picture of the current financial position so you can determine how best to refinance or restructure the business time. The next obvious step case step is to contact us a DPM.

PodMD
Kimsor thank you for your time here today in the pot in the studio. To sum up for us. Could you please identify the three key take home messages from today’s podcast on the importance of business lending?

Kimsor
Yep, the first one I will say understand your business plans and goals, what exactly you’re looking to achieve. Secondly, you want to understand how the business loan will impact on the business profitability and the cash flow of the business. And lastly, speak to the experts at DPM working with a team of experts here. DPM can help you make the right decision.

PodMD
Thanks again for your time and the insights you’ve provided. Not thank you.

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