Loans as Assets

Nguyen 060422349 [2006] MRTA 498 (13.12.06) demonstrates that properly documented loans by an applicant as a director & shareholder of the company which operated the business will qualify as assets for the subclass 845 established business visa.  845.214 says:

The total value of the net assets in Australia of the applicant, or the applicant and the applicant’s spouse together:

(a)      is; and

(b)      has been throughout the period of 12 months immediately preceding the making of the application;

at least AUD250,000.

The MRT concluded:

[Re] cl.845.214 & cl.845.215, the [MRT] accepts the evidence of the loan given to Daylite Technologies.., as evidenced through the account of the first named applicant’s wife and associated bank cheques. The financial records of the company evidence this loan and it is an asset of the couple for the purposes of both clauses. This loan was made in Dec 02, and was in existence for the relevant 12 month period..11.9.04 to 11.9.05. While there was evidence of the existence of a loan agreement in respect of the couple in 2004, the [MRT] accepts.. this related to a proposed purchase of real estate which did not proceed and that at the time of application and prior to it, this had no impact on their overall financial position, the money either being separately held or returned to the financial provider.

The amount of the loan, being $400 000 is greater than that required in either cl.845.214 or cl.845.215. Relevant PAM entries indicate that assets in the business can be counted for both sets of criterion,

The case shows that loans by directors must be evidenced, documented and also be included in the accounts of the company.