Since 1998, Deposit Bond Australia (‘DBA’) has built a reputation as a professional deposit bond issuer that you can count on. Underwritten by QBE, deposit bonds issued by DBA are accepted by leading property groups, developers and their financiers throughout Australia. We pride ourselves on being consistently reliable and efficient in assessing applications, approving and issuing residential or commercial deposit bonds within 2 – 48 hours, depending on the complexity of the purchaser’s situation.
Looking to acquire a commercial property? Deposit Bond Australia is able to issue commercial deposit bonds with terms up to 48 months for those purchasers buying in their own name or 24 months for a corporate entity (eg: companies, trusts and superannuation entities).
This month, the team at DBA offer a guide to commercial deposit bonds for individual and corporate buyers:
Deposit Bonds for Commercial Buyers
A deposit bond is a form of financial guarantee accepted in lieu of cash when buyers must pay up to 10% of purchase price as a deposit to secure their commitment to buy a residential or commercial property. The underwriter, QBE Insurance (Australia) Limited (‘QBE’) guarantees payment to the vendor up to the deposit bond value. Deposit bonds are the only means by which a deposit can be paid and the purchaser’s capacity to settle qualified, before committing unconditionally to the terms of the Contract for Sale. For more information on deposit bonds, please see The Essential Guide to Deposit Bonds.
Types of Suitable Commercial Properties
There are several types of suitable commercial properties for which DBA is able to issue deposit bonds, including:
- Standard Commercial Property – Improved or unimproved properties predominantly used or to be used as offices accommodating commercial or administrative services
- Non-Standard Commercial Property – Including child care centres, medical clinics, aged care facilities, service stations, gymnasiums and sports centres
- Standard Industrial Property – Improved or unimproved properties predominantly used or to be used for the storage and distribution of goods (eg: warehouse) or light manufacturing (eg: fashion)
- Standard Retail Property – Improved or unimproved properties predominantly used or to be used for the sale, hire or lease of goods and/or services to the general public or trade
- Non-Standard Residential Property – Comprising multiple dwellings on one (1) title or separate titles purchased in-one-line (eg: boarding houses, motels, hotels or B&B accommodation)
- Standard Rural Residential Property (over 10 hectares) – Provided the deposit bond only relates to the real estate component of the purchase price and not the ‘going concern’ value
- Vacant Landholdings – Potential subdivisions whether zoned for residential, commercial, industrial or retail usage
Please note that the property must be located in an Australian capital city or regional centre with a population of at least 100,000. Applications supported by unconditional loan approval in geographic areas with smaller populations are also acceptable.
Eligibility Requirements for Individual Buyers
To apply for a commercial deposit bond as an individual buyer, the applicant must be a permanent Australia or New Zealand resident purchasing in Australia. Individual applicants can apply in their own name or using an ABN. Deposit bond approval is subject to a mandatory test of the applicant’s ability to prove availability of 105% of the purchase price at the contract settlement date. Any Applicants’ capacity to settle is assessed as at the date of application. To enquire the cost of a commercial deposit bond,, please contact our friendly staff for a quote. For more information, download our Credit Policy Snapshot for Individual Applicants.
Eligibility Requirements for Corporate Buyers
To apply for a commercial deposit bond as a corporate buyer, applicants can be trusts, companies (trading or not), partnerships or superannuation funds. It is mandatory for Corporate Applicants and associated parties (Directors, Shareholders or Beneficiaries) to prove ability to settle assessed as at the date of application. The purpose of acquisition can be for owner occupation or investment on freehold, strata, leasehold, community and company titled properties. To find out the cost for a commercial deposit bond, please contact our friendly staff for a quote. For more information, download our Credit Policy Snapshot for Corporate Applicants.
Benefits of Choosing DBA for Commercial Deposit Bonds
Deposit Bond Australia is an Australian owned business operating in association with Australian A+ (Stable) rated underwriter QBE, meaning that all processes are managed in Australia with customer information securely stored onshore. Our in-house credit assessment, equivalent to that of a full doc loan application, ensures that applicants do not need to arrange a loan approval first. Additionally, the combination of broad credit policy, professional service and competitive pricing across all terms underpins our reputation as Australia’s premier issuers of commercial deposit bonds.
For more information about our range of products and services, please refer to our Information Brochures located under Downloads.
The friendly staff at Deposit Bond Australia are available during normal business hours (EST) to talk to you about your needs. If you have any questions about commercial deposit bonds or would like a quote on buying commercial property, please Contact Us or use our Freecall number 1800 266 388.