The Borrower ran a café business in Perth, Western Australia. The business was originally set-up as a company with three business partners but soon after the official opening, one of the partners absconded.
The remaining partners entered into an arrangement to dissolve the company and sell the business assets to their new general partnership.
The company had an outstanding court action from the Office of State Revenue noted on the company credit file which prevented them from moving forward with their plans. They were unable to obtain traditional bank finance because the new general partnership had no trading history and their individual credit files showed the court action.
The Borrower obtained a short-term loan to pay-out the court action and additional cash-out to assist with the Christmas/New Year trading season. The loan was secured by a Registered Second Mortgage over two residential properties.
One of the properties was placed on the market for auction and the loan was subsequently repaid via the sale of this property.