Strata schemes facing a temporary financial crisis due to the coronavirus – or just anxious to get on with delayed projects – can now get an instant answer on whether or not they’d qualify for a strata loan, and for how much.
Thanks to a new product called Pronto, schemes seeking instant finances to cover defaulted levies, unexpected imposts on their budgets or delayed maintenance and repairs can learn within minutes what their options really are.
Australia’s leading strata loan company (and Flat Chat sponsor) Lannock Strata Finance has launched Pronto to allow strata committees and strata managers to punch in a few details and get an answer and, sometimes, pre-approval for a loan within minutes.
And that could be a lifeline for those owners who have paid their levies, as well as those who have defaulted because of a reduction in their income due to the coronavirus pandemic.
“Pronto is a game changer for strata owners and managers in Australia, allowing instant assessment of the borrowing capacity of their unit block,” says Lannock’s Paul Morton.
“This platform is so easy to use, you simply need to enter a few details such as the postcode of the strata property and the number of units and the Pronto algorithm will assess and provide a conditional approval for the desired loan.”
Many strata schemes’ budgets have been thrown out of whack by multiple owners simply unable to pay their levies due to the effects of the coronavirus pandemic.
At the same time, there have been increases in energy and staffing bills as more people have been working – or not – from home, while common property areas have required additional cleaning.
For schemes whose budgets are super-tight with no room to manoeuvre, this has been disastrous and some are even considering imposing special levies on those who can pay to cover those who can’t.
Enter Pronto. Lannock says it’s a simple two-stage application process that leads to an almost instant assessment and approval, with a follow-up from a consultant to explain the nitty gritty of how their loans can service your scheme’s needs.
It’s fair to say that many strata owners are wary of strata loans because their interest rates are higher than normal bank loans, due to the fact that strata loans are effectively “unsecured”. Strata law doesn’t allow schemes to offer common property as security.
And some owners who could pay a special levy from their cash reserves don’t want to have to pay their share of any interest that might accrue.
But special levies can be brutally unfair on many owners and you might never get that money back, even when the unpaid levies are brought up to date. The best you can hope for is lower levies sometime in the future.
But if you are raising a strata loan to cover a shortfall in levies, it’s pretty much free money. Strata law in NSW demands a 10 per cent penalty interest rate for unpaid levies. Other states have similar ways of recouping losses.
When your owners eventually bring their levies up to date and pay the penalty interest, that will more than cover the principal and interest on the loan.
“Pronto is all about empowering strata owners and managers with the necessary information as fast as possible to help them make the right decision for their individual circumstances,” says Paul Morton.
“This system has never been seen in Australia and allows strata managers and owners immediate information to help assess if a strata loan is an ideal option for their situation.”
Strata managers and committee members can get their instant, no-commitment assessment by clicking HERE.