Every commercial investment opportunity is carefully analysed with the Briqwise Value Assessment (BVA). Using this tool, we measure the strength of the real estate security and the reliability and quality of the borrower/small business owner. The result is a profile that determines the risk profile.
This risk profile sets the interest rate and therefore the return on investment. There are four profiles with different interest rates, ranging from 5.95 to 13.95 percent.
|A||5.95% – 7.95%||20 – 25 pnts||Defensive|
|B||7.95% – 9.95%||15 – 20 pnts||Careful|
|C||9.95% – 11.95%||10 – 15 pnts||Aggressive|
|D||11.95% – 13.95%||5 – 10 pnts||Speculative|
Valuation of real estate and assessment of borrower
Briqwise applies the following five criteria when assessing a loan application.
Real estate criteria:
- Loan-to-Value ratio
- Track record
- Financial information
To obtain a reliable and objective overview of the loan application we use among other things; credit scores, company and personal financials (if available), panel valuers, and other generally available information.
The quality of the security property is crucial in the assessment process. For that reason, we always use an independent, registered panel valuer.
The evaluation and scoring per criterion are as follows:
|5 points||LVR <50%||The investment is well protected against changes in the value of the property.|
|3 points||LVR 50%-75%||The investment is sufficiently protected against changes in the value of the property.|
|1 point||LVR >75%||The investment has limited protection against changes in the value of the property.|
|5 points||The property scores high in terms of location (Metro A), functionality, appearance and facilities (parking, access to public transport, etc.).|
|3 points||The property scores well in terms of location (Metro B), functionality, appearance and facilities (parking, access to public transport, etc.).|
|1 point||The property scores average in terms of location (Metro C), functionality, appearance and facilities (parking, access to public transport, etc.).|
|5 points||The exploitation of the property is in line with current use (rented property with continuous leases, refinancing of existing use, etc.).|
|3 points||The exploitation of the property changes compared to the current use or the property is being redeveloped (renovation, etc.).|
|1 point||Any other property use|
|5 points||The borrower is an experienced business owner with a strong track record.|
|3 points||The borrower has experience and a track record that is sufficient.|
|1 point||The borrower has limited experience and a less robust track record.|
|5 points||Solvency and profitability are excellent and the cash flow is stable.|
|3 points||Solvency and profitability are good and the cash flow is more or less stable.|
|1 point||Solvency and profitability are sufficient.|
The return on an investment depends on the profile
Example 1: An investment in a ‘Class A Loan’ receives a lower return because the quality of the real estate is deemed high and the risk profile of the borrower is low. This represents a conservative, low risk investment.