What are the terms of the Loan?

Each QuantumWarrant includes a limited recourse Loan (which is limited to the Property) made to an Investor by Quantum. Quantum has no right to seek repayment of the Loan, Interest or other costs from the Investor other than by exercise of the Mortgage over the Investment.

Finance will be arranged upon receipt of an Application. An Application must be received 4 weeks prior to exchange on the Property and 8 weeks prior to the completion date of the contract of sale of a Property, unless prior arrangements have been made by Quantum.

It is Quantum’s intention to arrange Finance with a fixed interest rate for a period of at least 1 year, and up to 10 years, if requested by the Applicant in their Application. Quantum will endeavour to source Finance on these terms, but does not guarantee it will be able to provide a Loan with a fixed interest rate period for the full period requested. Any Finance sourced with a fixed interest rate greater than 1 year may have additional Finance costs payable by the Investor to Quantum upon making a Completion Payment or part repayment of the Loan.

Finance will not, for the purposes of a QuantumWarrant, exceed 80% of the value of the Property.

The Loan term may vary depending upon what Loan term Quantum is able to achieve from the Financier on the Property used as security of a QuantumWarrant. The Loan term may be less than the available 10 year period (to the Maturity Date).

The type of Loan and the interest rate will depend upon the location, tenants and other variables in relation to the Property. Upon vetting a potential property as a QuantumWarrant for an Investor, Quantum will provide indicative Loan parameters in its quote.

Prepayments of interest

Part of the First Amount will be applied towards the payment of prepaid interest on the Loan. Investors should be allowed a tax deduction for the prepaid interest when the prepayment is made. Normally the pre payment will be for one year in advance to the next Annual Reset Date unless otherwise agreed by Quantum. Quantum may fix the interest rate for a period of Finance greater than one year. This will be at the discretion of the Investor otherwise all Loans will be fixed for one year, interest payable in advance.

Borrowing Fees

Quantum will charge a lump sum Borrowing Fee in respect of Loans to Applicants. The Borrowing Fee will be imposed at the time a Loan is made and is used to cover the fees payable to the Financier, legal fees on the finance and the management of arranging the finance in preparation of the settlement of the Property. This fee will normally only be paid at the start of a new Loan term. So if a loan term is for 5 years the Borrowing Fee would again be payable if the Investor elects to refinance the Loan rather than make the Completion Payment.

Early Repayment Charges

The early repayment of the Loan may result in a Break Fee.

Borrowings

Quantum may provide a Loan for Investors up to 80% of the value of the Property.
Quantum may source its Finance from a variety of Financiers, including mortgage funding via Quantum Mortgage Trust a registered mortgage trust with the ASIC – ARSN: 095-909-096. For the purpose of securing repayment of the Loan and the Interest, the Security Trustee will provide Quantum or as Quantum directs a Mortgage over the Property. The Security Deed allows the Security Trustee to provide security over the Property on behalf of the Investor.
Quantum will act in this respect on behalf of each Investor under a Power of Attorney.

Security
In accordance with normal market practice, upon default.
Quantum’s recourse will be limited to the Property.

Repayment of the Loan
The Investor may repay part or all of the Loan at the Annual Reset Date.
If the Investor does not pay the Interest or the Completion Payment at the Maturity Date, Quantum may exercise its rights under the Loan Agreement to sell the Property. Interest on the loan will be payable until the property is sold. The interest rate will be the one year interest rate applicable at Annual Reset Date.