A plain-English glossary: LVR, serviceability, WALE, bare trusts and normalised EBITDA

LVR — loan-to-value ratio. The loan amount as a percentage of the property's value (or the lower of value and purchase price). A $720,000 loan against an $900,000 property is an 80% LVR. Lower LVR generally means a better rate, no lenders mortgage insurance, and an easier approval — which is why structuring a purchase to land under common LVR thresholds is often worth the planning.

Serviceability — the lender's assessment of whether you can actually afford the repayments, not just today's rate but a buffer above it. It weighs verified income (and how heavily different income types are shaded — overtime, bonuses, rental income, self-employed earnings all vary by lender) against living expenses, existing debts, and dependants. Two borrowers on paper-identical incomes can get very different answers from the same lender.

WALE — weighted average lease expiry. A commercial property metric: how long, on average, the building's leases have left to run, weighted by the income each tenant contributes. A longer WALE signals more certain income and usually supports a lower cap rate (higher value); a short WALE means re-leasing risk sits closer on the horizon, which lenders and buyers both price in.

Bare trust — a holding structure where legal title to an asset sits with a trustee while beneficial ownership sits elsewhere. It's the structure behind every SMSF property purchase using a limited recourse borrowing arrangement: the fund can't hold the legal title directly while debt is outstanding, so a separate bare trust holds it until the loan is repaid. TransformBiz sets up trust structures in-house; our new SMSF purchases are commercial property only, alongside refinancing existing SMSF loans.

Normalised EBITDA — earnings before interest, tax, depreciation and amortisation, adjusted to strip out one-off items, owner perks and non-commercial arrangements. It's the number buyers actually pay a multiple on when acquiring a business, because it reflects what the business would earn under normal, arm's-length operation — not what it happened to report with a founder's personal expenses still in the books.