I have had the privilege of dealing with Paul Grant at Mike Phipps Finance for the purchase of a Quest re-sale.
I must admit that it is a very rare day that I can say that my experience has categorically exceeded my expectations. I say this with considerable industry experience in Banking and Finance having worked across three Australian Banking Corporations over 18 years, and another five years leading accommodation businesses dealing with numerous financers.
If you are looking to find a business partner that has deep industry understanding that will add value to your journey, then I could not recommend anyone else.
In fact, I look forward to conducting more business with Paul and Mike Phipps Finance as they are the No 1 operator in the industry. Thank you for all your time and support.
John Mackenzie - New Quest Franchisee
MR sales team are proud of their association with Mike in his past professional life and we were very happy to be involved with Mike in his new venture that resulted in the first management rights finance deal as Mike Phipps Finance.
Jake Clarke - Director
Management Rights Sales
“My firm and I have dealt with Mike Phipps over many years in relation to the financing of management rights.
Mike has a wealth of knowledge and experience in the field which, coupled with his
integrity and enthusiasm, ensures his clients are very well looked after.”
John Mahoney - Mahoney Lawyers
Our firm has dealt with Mike Phipps over many years assisting our mutual clients with the most tax effective lending options for their acquisition of management rights, motels, hotels, caravan parks and various other accommodation business opportunities.
Mike’s professionalism, integrity and personalised approach ensure our clients are always in good hands and get the best result every time.
Tony Rossiter
Holmans Accountants
"We’ve never looked back and appreciate the consistent support from you and your team throughout your time with your previous employer.
We wish you all the best with Mike Phipps Finance and have no doubt that you will guide many more new and experienced managers through the financial labyrinth of the Management Rights
industry for many years to come."
Gordon & Suzanne Higman
ATLANTIS MARCOOLA
Borrowing for management rights. How much can I borrow?
You can download the information detailed within our ‘Management Rights’ section as a printable PDF for future reference. Click here to access the PDF document.
Typically, lenders will apply one of two gearing calculations to management rights funding :
Unit value x gearing ratio – usually 80%
Management Rights Value x gearing ratio – usually 65%
Or
Unit and Management Rights Combined Value x 65% to 75% gearing.
Experience suggests (when borrowing for management rights) that working on an “all up” gearing ratio of around 70% is a good place to start. As an example the calculation then looks like this :
Unit Value $400,000
Management Rights Value $700,000
Costs (say 5%) $55,000
Total Required $1,155,000
Less $385,000 deposit + costs
Loan Amount $770,000 being 70% of the combined purchase price
Of course, gearing is only one part of the equation. Lenders are just as interested in the quality of the asset, the borrower’s previous work experience and the capacity of the asset to service debt. In particular most experienced management rights lenders will consider the following issues when assessing a loan :
Balance term of the agreements (including options)
Sustainable net profit
Future prospects or upside
Debt Servicing Capacity
Opportunities to increase net profit
Composition of the letting pool
Operating business model
Legislative Risk
Economic Trends and Drivers
Qualifications of the intending purchaser
Before your application is presented to a prospective lender we will go through a thorough assessment with you. Our service ensures that your application is presented in the best possible light. Intending new entrants to the industry should not be deterred by not having had a management rights previously. In most situations “life experience” and an ability to communicate effectively are the most important qualifications.
“I have worked with Mike over several years and always found him extremely knowledgeable and well researched. His in depth technical ability and significant industry contacts make him a valued part of my operations within the accommodation sector.”
Richard Arbon – Director, Arbon Property Group and Blue Chip Accommodation
Thank you so much Simone and Paul, your service has been invaluable. Again it has been an absolute pleasure working with everyone at Mike Phipps Finance.
"Thank you" such a small word but meant from the heart.
Sue & Brian Elliot
Hi Gentlemen. It has been a long road but we got there in the end. Settlement has happened. Many thanks to you and your team for their commitment, patience and absolute professionalism with all aspects of this transaction. Now the hard work begins.
All the best for Christmas and 2015.
Mark & Lorelle Nugent Irismay Gardens, Southport
We would recommend Mike's professional and high quality service to all those interested in purchasing management rights like ourselves.
Glenys & Murray Kane - Regatta Noosa
During the purchase of our management rights Mike was a constant source of knowledge and advice.
Paul and Leanne Hogan
Mike made it easy for us at a time when we were under a lot of pressure, and we would recommend him to anyone who requires financial assistance for a similar venture.