Hiring Auckland Company Lawyers: Tips and Tricks
Having a good lawyer by your side can save you from the inconveniences and frustrations that some with running a business or an organization. While lawyers can help fight any legal suits against your company/business, they can help interpret laws, regulations, and even advise you accordingly especially when planning a merger or a partnership. With the field already bloated with all types of lawyers, finding the right one to hire can be quite a challenge. Several factors need/have to be considered when shopping for a commercial lawyer. Outlined below are a few tips on how to land a good company lawyers Auckland based.
- Interview more than 3 commercial lawyers
All lawyers aren’t built the same. You therefore need to look for a company lawyer who specialises in commercial and corporate law and not just any lawyer you come across. Experts recommend interviewing at least 3 lawyers specialising in the same to find a good one. These lawyers should have at least 3 years’ experience in the field among other qualifications. Some of the important questions to ask when interviewing lawyer include how long they have been in practice, special certifications and skills acquired, and legal fees, and if he or she has worked on similar cases to yours.
You may also have to run several background checks on each lawyer before contacting them. This should help add well-respected and experienced company lawyers Auckland -based to your shortlist.
- Consult with local law directories or bar
With the short list of potential commercial lawyers, take some time to dig deeper into their past records and licensing by looking them up in local law societies or directories. These registers keep records of registered lawyers and also contains other valuable information such as the law firm the lawyer is registered with, their ratings, and client reviews of the same. Such info can come in handy when looking for specially qualified Auckland company lawyers.
- Consider referrals from other lawyers
Determining the best-qualified attorney can be a daunting task especially if you aren’t a lawyer yourself. Nonetheless, asking another lawyer for a referral, say a family attorney, can help you find/get valuable info about other attorneys. A good lawyer will refer you to the best corporate lawyer they know, which again improves your chance of finding the most competent one around.
- Run background checks
Aside from the flashy portfolio, many years of experience, and the affordable legal fees, you need to run several background checks on these attorneys before making the final decision. Checking with disciplinary agencies, customer reviews, and ratings can help find valuable info about a lawyer. Some of the most reputable lawyers may be hard to find, but with a good background check, it should be easy to land to one.
These are just but a few simple tips and tricks to help you find the most promising company lawyer to hire. One thing you however need to know is that just because a lawyer has been in the field for many years doesn’t guarantee quality service and representation. Some newbie lawyers in the industry may have what it takes to take your business to the next level.
Commercial Real Estate Finance in NZ
Developing real estate can be one of the most profitable projects you can ever undertake. But for people new to the industry, the path from zero to profitability can be a long and treacherous journey. In this article, however, we are going to explain a few things about the industry and getting property development financing for your project.
Finance for property development projects
Funding for redevelopment projects is usually calculated by estimating the increased value of the development and then borrowing against that forecast. Funding can be released in various ways including as staged payments over time or on completion of pre-agreed stages in the project. An individual may obtain finance for a proportion of the loan to value however this will depend on the details of the project, the developer’s experience, the location and the nature of the project. This article will provide details on the different options available to financing property development projects.
So any prospective developer must be fully prepared before any approach is made to lenders for the required finance for any development project. These preparations have to include all the necessary documentation relating to the property that is to be developed, a complete business plan, which can demonstrate the ability of the developer to carry out the project and to be able to manage the debt that is being undertaken. The developer must ensure that these documents are prepared well in advance, properly reviewed and deal with any possible objections. Getting help from commercial finance brokers can help to create the necessary documentation, as they are people who will be well versed with what financiers and lenders ask for.
How much can you borrow to finance your development project?
If you are like most people, you would need a mortgage to buy the property you want to develop. How much you can actually borrow really depends on how much money you have in deposit and your income.
If you do not have other people who can apply for a group mortgage, you can have a family member guarantee your loan. The lenders usually take into account the income of the guarantor as well as your own. Although you would bet the only one to make payments, both of you would be liable.
Figures presented in any proposal for finance need to be realistic and must allow for downward trends in property markets. Contingencies must be catered for while escalation of costs, need to be adequately factored in. Any valuation for the proposals becomes more credible if independent surveyors are appointed.
Before undertaking a project, always make sure to make a budget for all costs associated with settlement of the sale of a property, building your property and putting your property on the market. Once you have the budget, make provisions for a contingency fund. Your contingency fund should be 10% to 20% of your total budget.
Joint venture finance
One advantage about a joint venture financing option is that the project developer can obtain 100% funding for the construction. Of course, how the joint venture is set up is completely dependent on the development you are looking to complete. A legal document is drawn up to indicate how much income will be shared between individuals which alleviates any confusion between developers and financiers. It will also indicate who is liable for which project costs and what profits will be shared. The joint venture finance option can be used for almost all construction projects.
Commercial real estate finance carries a lot of risk due to the extended time of the projects during which conditions in the market might change which could cause a decrease in the profit of the project.
There are various options to find funding for property development and each of them operate in different ways. If you have an understanding of each of these funding methods you will be able to navigate the financing of your construction project. However, even a brief glimpse into the world of property development finance is better than nothing. But, you must still talk to professionals, legal, accounting as well as financiers. Do not sign any documents until you have had thorough discussions with your lawyer and accountant.
For help with NZ commercial real estate finance, Global Pacific is one of the leading brokers. This is their website www.globalpacific.co.nz.
How to Find a Commercial Lender
There are many reasons why a new or existing business might need to find a commercial lender. Perhaps you need to buy some commercial real estate for a new or expanded location, or you need to purchase some expensive piece of equipment for your start up business. Whatever the reason, finding a commercial lender is the first step in getting the loan.
Many different types of companies offer commercial mortgage funding. These include such diverse sources as commercial banks, CMBS conduit lenders, life insurance companies, and private lenders. Another source for a commercial loan is a commercial investment firm.
CMBS conduit lenders are a special kind of security investment lender. CMBS stands for commercial mortgage backed securities. The conduit lenders originate commercial mortgages, then set up asset pools from these mortgages. Shares in these pools are then sold on the open market to interested investors.
The Internet is a great place to start when trying to find a commercial lender. There are sites which will submit a single application to dozens or even hundreds of potential lenders at the same time. This saves you a significant amount of time over filing applications for each of these lenders.
You can also use the Internet to seek out individual companies that offer commercial loans. The advantage of doing this is that you can find a company offering exactly the terms you need. You can still file the application electronically for most of these companies, just like with the aggregated sites.
You might also want to visit a local branch office for a bank to see about a commercial loan. Sometimes speaking to a lender in person about your needs is more effective than dealing with everything through electronic communication. You can also sometimes get a better feel for how they will treat you as a client by speaking to a banker in person.
If you are a local business, you might have luck getting a commercial loan from a local credit union. Even if your business doesn’t meet the requirements for a commercial loan from one of the larger banking institutions, a local credit union might be willing to work with you. The credit union will know the local economic situation better than a large national corporation and might be more willing to listen to your business plan.
Before attempting to contact any Auckland corporate lender about a commercial loan, be sure your paperwork is all in order. You’ll need to have your financial records available, including an income statement, cash flow statement, balance sheet, and a retained earnings statement. The more documentation you can provide when you apply for the loan, the faster the process will be and the sooner you can get your money.
Remember that there are many options out there for finding a commercial loan. If you don’t like the terms offered by one particular lender, or you don’t think your business will be able to make the payments required by that lender, you can simply apply somewhere else. Don’t let a lender convince you that a particular set of loan terms is your only choice unless you have already spoken to a number of lenders. Do your own legwork and don’t expect a loan officer to be on your side.
Finding an Auckland corporate lender may seem daunting, especially in the midst of all of the other complications involved in running a business. However, it doesn’t have to be very hard to find the right lender for your business. There are a lot of ways to find a commercial lender, especially now that the Internet is so widespread in the financial world. You can use a website to apply with many lenders at once, or use the old-fashioned route and just go into your local bank or credit union and ask for a loan. Whatever you choose, make sure you get favourable terms on your loan and that your business can handle the payments required.
How To Find An NZ Commercial Property Development Finance Company
Commercial real estate development can be one of the most promising and profitable business activities you can undertake. By investing in real estate and developing your asset you will find that property values gradually increase over time, making it one of the best long-term investments you could have With that being said, if you are interested in growing your wealth then now is a good time to consider investing in commercial real estate development. Many people wish they knew where or how to invest into real estate, but they do not know where to turn. This article will give you some pointers on how to find a commercial real estate development finance company in Auckland.
In order to position yourself to succeed in commercial real estate development you are going to need to find a reliable finance company or investor. Often investors only want to be the money men and do not want to get involved in the development of properties. They make their profit from lending money to developers who make their profit from the actual development activity itself. The investors are the people you need to talk to for funding your commercial property development project.
For developers there are a few ways to profit. The two most common ones are to find a section of land and erect a building on it. This can be an apartment block, a warehouse, a strip of retail outlets or an office block. You can see these property development projects all over Auckland. Once the building has been completed the developer has two main options.
They will sell it to a company that specialises in property letting and management. Alternatively, they might keep hold of the property and let it themselves to generate an ongoing income stream. Either way, the developer needs to repay the initial loan from the investor or lending source.
Another method of making money in real estate is land development. When you or someone else you know owns land in a desirable area it will one day become high in demand. As the general population grows the need to expand into different lands increases, making land owned in certain areas highly desirable. If you can manage to purchase land in a location that will one day grow in value then you can make a lot of money. Keep in mind you can also work a deal with a real estate developer to develop property on your land so that the two of you can profit from selling or leasing it out at some point.
Contact local investors to see if anyone is interested in working with you directly. Additionally, also make sure that you are getting in touch with banks and other financial entities such as an Auckland property development finance company to see if any of them are interested in helping you develop property as well. There are a great number of investors available who are interested in purchasing and developing property in various areas. Seek out the most prominent and the ones more than likely to do business with you so that you can join forces to make a considerable return on investment. Financing in real estate can come from a variety of sources not just a development finance company. Find the source that best works for you so that you are able to succeed at making a profit in the near future.
Remember, persistence is key when it comes to real estate development and investing. By persistently getting in touch with various investors or development finance companies and making sure you keep an eye on the market on a regular basis you will put yourself in a better position to succeed. Try your best to find properties that are or will be high in demand, and/or to find land in areas that you know development will take place in the future. Every contact you make that is an investor or financier should be added to your database. When you need commercial investment to help you fix or develop property go down your list of contacts to find a development finance company that is willing to help you. That is the best way to succeed in this business.
Global Pacific is a well established Auckland commercial finance company. They work in the areas of property development, property investment and various types of business financing. You can get more details here.
Commercial Mortgages in Auckland
Buying commercial premises seems to be overlooked by many people or business owners. Although at first it may seem more advantageous to rent your business premises and obtain a short-term lease for a property, in many cases, the reality is that you will obtain more benefits from buying the building you occupy. In case you have an interest in buying a property, read this guide to learn what is the best way to obtain a commercial mortgage in Auckland.
What are the advantages of a commercial mortgage in Auckland?
The advantages are numerous. First of all, it is important to recognise that the payments on a mortgage may be similar to the rent you are already paying for your premises. The difference is that there is a big benefit by taking out a mortgage and that is that, in the end, you will own the property. That will mean you do not have any rent to pay to a landlord once you become the outright owner. Further you will have another asset in your wealth portfolio.
Another downside to renting offices or a commercial building is that you are always subject to constant rent increases. While you can negotiate these, that takes time and cost plus you know that the rent is going to go up over the years however good your negotiation skills maybe. So choosing a commercial mortgage will offer you cash-flow stability.
Another benefit is that the interest on your mortgage payments is tax deductible. This gives an attractive option helping you to reduce the yearly tax burden. In case you are the owner of many commercial properties, you will have the option of sub-letting your properties, although you might need the permission of your lender.
What are the disadvantages?
The first and biggest disadvantage is that you will have to make a significant down payment for the property. This is considerably more than a residential deposit which is currently 20 per cent. In the case of commercial mortgages, the deposit is usually 40 percent of the value of the building or premises you want to buy. This may be money that you may not be able to call upon or it is set aside for other initiatives on your company.
If you are not a stable business or your business is growing rapidly, a commercial mortgage is not the best solution for you. It is not easy to sell a commercial building, the process can take many months. This can hinder your move to a new location. It will also tie up your capital preventing you from buying a bigger office or whatever type of building you are looking for.
Another important disadvantage is without a doubt related to the responsibility involved, as you are the only person involved in up keeping and maintaining the building according to standards. If you rent a part of the building or offices you work in, then you will be sharing the costs of the upkeep and repairs. If you own the building out-right then you will be liable for all of the maintenance expenses.
What are the costs?
In general a commercial property will have a higher interest rate than a residential mortgage, mainly because the overall value is higher and the risks are far greater for the lender. No one can guarantee that a business will succeed, and this is why the lender is obliged to ask for higher rates. Other than that, all other payment methods and terms are similar to those of a residential mortgage. Although almost all banks and lenders do offer these commercial mortgages, it is important to do a little bit of market research before making a decision.
Who should benefit from a commercial mortgage?
This depends on your future business plans. If you are confident in your business and its chances of success, then this type of finance is perfect for you. Another advantage is that, in the end, you will be able to own the property and maybe have enjoyed an increase in property prices. A further scenario for benefiting from a commercial mortgage is deciding who will actually own the premises. For example, it is common for people to set up a new company that owns the building and then rents it to the actual trading company and in so doing, gives you a separate income stream. Or you can establish a family trust which raises a commercial mortgage in Auckland to own the building. In this case the beneficiaries will have a rental income.
Where can you find a commercial mortgage?
The main banks have commercial lending departments but they tend to be quite rigid and inflexible in their lending criteria. They are also reluctant to lend on specific types of commercial property so you may need to look at different options.
The good news is that there are also more smaller finance houses operating that can provide commercial mortgages than in the residential field. These can provide funding for a range of different projects and they are certainly more amenable than the regular banks.
These lenders will also have a big range of costs, interest rates, down-payments and other factors some of which will be more attractive to you than others. For example, would you prefer a lower interest rate or a smaller deposit? You can negotiate these options for a commercial mortgage in Auckland with specialist commercial mortgage lenders far easier than with a bank.
Global Pacific Finance http://www.globalpacific.co.nz/
Is Mezzanine Financing in New Zealand Right for Your Project?
There used to be just two forms of lending to enable new projects and strategies get off the ground – banks loans and equity funding – but all that has changed over recent years with a growing number of mezzanine financing in New Zealand.
Mezzanine financing will cost you more than a conventional type of bank loan but could still be the perfect answer for businesses which foresee rapid growth or those involved in some sort of leveraged buy-out situation.
Essentially mezzanine finance is a hybrid between traditional type bank loans and equity funding. The provider in a mezzanine finance agreement will hand over the money (just like in a bank loan situation) but the repayments will not be made in interest only, some element of the equity of your project will also be included in the deal. The lender will therefore have their initial investment paid back (with interest of course) as well as benefit from shares in the profits when the business has achieved its projected growth.
Mezzanine financing video
Mezzanine finance is only available for larger projects; these investors are interested in handing over large chunks of cash in return for hefty profits. This means that many SMEs with lower investment needs may not be in a position to take advantage of the hybrid form of lending known as mezzanine finance.
Banks do not like to lend on high risk projects – there is an old saying that banks only like to lend money to the people or businesses which don’t really need it – they like to feel that they are in a “win-win” situation. Alternatively choosing to use equity funding can prove to be expensive in terms of handing over large chunks and even control of your business.
Mezzanine loans do fall somewhere in the middle. The loan will generally be granted in a similar way to a traditional bank loan but the lender will of course need to be confident of high returns in such a potentially high risk situation. This does not mean that the business owner or shareholder must hand over valuable shares but the investor will look forward to making handsome profits on the amount they have invested within the company or project.
Unlike a traditional bank loan with monthly repayment schedules which can affect the cash flow of a growing business, mezzanine loans will be typically repaid in a lump sum towards the end of the agreed term. Mezzanine loans are naturally more expensive than most traditional bank loans but that really is only to be expected when you consider the added risks involved and the other benefits.
One of the most common occasions when this type of finance is used is during leveraged buy-outs as it provides flexibility while retaining the maximum share holding for the current owners. It may also be employed during the early stages of a business which has a high, rapid rate of growth potential. The mezzanine loan can become part of a larger investment program along with conventional term bank loans and other forms of equity finance.
This type of financing arrangement can be the perfect solution for a newly established business as a method of bridging the gap between the amount of financing available from conventional bank loan arrangements against the assets of the company and the perceived value of the new business project. It can be used as a means of financing acquisitions, corporate expansions projects, management buy-outs, leveraged buy-outs, recapitalizations and more.
Some real estate developers will also rely on mezzanine finance to secure the finances they need for project development – it can be a handy source of income when the primary mortgage lender or the construction loan is in excess of 10%. Collateral may be required in these circumstances which allows the financier to take control of some of the assets in the event that the borrower defaults on the loan agreement or that a foreclosure takes place. These can be executed more rapidly than the standard foreclosure timeframe for the traditional mortgage which can take as much as 12 months. Stocks which are the personal assets of the borrower may be seized legally in just a few months.
The mezzanine finance format has been used very successfully for a large number of businesses and corporations over the years.
While the idea of mezzanine financing sounds a potentially costly it is in fact a handy and speedy form of finance. If you would like some more information about mezzanine financing in New Zealand, talk to the Global Pacific Finance.
They are commercial financiers in Auckland but provide funding to businesses all over NZ.
Their website has more details about the types of commercial finance they offer including mezzanine financing.
Making Equipment Financing Decisions for Business
Businesses grow and as they do so they need more resources. This can frequently include the need for more plant, machinery and equipment. The problem is that often these items are very expensive and it is not possible to finance them out of cash-flow. So the business will aim to raise equipment financing at a cost and level of risk that the management can willingly live with. The costs are of course the repayments and the biggest risk here being that the business may not be able to service the debt consequently being forced into insolvency.
Generally speaking, there are about 5 main channels through which a company may get the funding it requires to raise sufficient capital. These are:
- Acquiring credit from suppliers
- Obtaining a loan from a bank
- Issue stock
- Issue bonds
- Obtaining a financing lease
Approaching a supplier for credit is one of the easiest ways through which a company can obtain funding. With this option, a company may acquire services and goods and are given a specified period of time to pay for them. If the company requires more credit from the said supplier, their financial controllers can negotiate for longer credit terms. Payment terms may also be stretched. This option works well as the creditors are keen on ensuring that their customer is still operational because if the customer becomes insolvent, they would lose their money.
Another reliable channel for getting funds is through approaching a bank. If the company has a revolving credit line with a bank, it can draw down, within its credit limit, as money is required and pay back when the business makes more money. This credit is usually guaranteed by the firm’s assets. However, if the business runs into trouble, paying back the money may become a problem leading to bankruptcy.
Bonds usually have a principal maturity and fixed interest rates on the contractual payments. Here, the risk lies on the company’s owners if they are not serviced. In this case, principle bond owners could easily exchange them, attaining ownership of the firm and eventually ousting the rightful owners. They tend to be an option only available to larger companies.
These have a non-contractual, non-tax deductible payment system. Stocks represent some form of ownership of the business and all its assets. At the same time, stock shares can be offered to raise capital at the existing shareholder’s expense. Here, new shareholders get to share ownership interest on an equal per-share basis with the existing shareholders. This dilutes the interests of the existing shareholders. However, the cost of going to market is extremely high both before and after the event so it is not a possibility for most companies.
Instead of opting to buy equipment, most companies will opt to get equipment lease financing for it. Things like heavy equipment, computers and cars can be financed for long or short periods.
A short period lease is referred to as the operating lease. The equipment is owned by the leasing company rather than the business itself. At the end of the lease, the properties or equipment is returned to the financier.
Long term leases on the other hand are a way of funding the purchase as opposed to the procurement of temporary services. They are commonly known as capital leases. Here, leased assets and financing liability are charged on the leaser’s books as though they were the ones acquiring the equipment.
The After-Tax Borrowing Cost
One of the main factors that will affect the ultimate financing decision is the issue of tax. All interest payments incurred from borrowing from bankers, bondholders and vendors are tax-deductible. However, shareholder dividends are not. The after tax borrowing cost is calculated as interest cost minus tax benefit. However, you should talk to your accountant before making any major financing decision.
Decisions about equipment financing will depend on various factors. The company accountant will be able to advise on some options to consider. However you will also want to talk to potential finance sources to get their input both in terms of their level of interest in the project and also what will the costs involved with their suggested approach.
Global Pacific Finance is a major player in equipment financing in NZ and they have plenty of experience to give you some ways forward.