Fast funding for land bank development in Western Sydney (finance offer within 4 days)

Fast funding for land bank development in Western Sydney (finance offer within 4 days)

How Development Finance Partner helped solve an urgent need for finance for a land bank project in western sydney.  Finance offers were made within 4 days of being engaged by the client.


Background /Issues

  • Development Finance Partner’s client purchased an englobo site in Western Sydney under option and lodged a DA for 37 residential lots.
  • The DA was issued however, the Client was under enormous pressure to settle in a tight time frame before the expiry of the contract
  • The Client was short of equity however had been able to pre sell the majority of the lots given the strong demand for lots in Western Sydney
  • The Client required urgent funds to settle the land and then in-principle approval for preferential equity to support subsequent construction funding to complete the subdivision

Scope

  • Development Finance Partner was engaged to provide a funding solution to both acquire the site and secure in-principle approval for preferential equity to underpin a senior debt civil works facility.  Given the tight time lines a funding approval was urgently required.

Results

  • Development Finance Partner was able to provide an Indicative Approval (subject to provision of pre- sale contracts) within four days of the Credit Submission being completed.
  • The Offer of Finance was in two tranches.  Tranche 1 was the first mortgage Land Bank facility at 73% loan to value ratio (LVR).  Tranche 2 was the conversion of the Land Bank first mortgage to a reduced subordinated preferential equity facility to 83% of Total Development Cost in the construction phase.
  • With this subordinated underpin, Development Finance Partner will now seek to secure a senior debt construction facility with conservative lending ratios at 71% TDC and 58% NRV.  The pre-sales provide 100% debt cover net.
  • This solution has enabled the Client to secure the site and to have the peace of mind that the equity underpin will facilitate a senior debt facility.
  • The return on equity to the Client is still attractive at 124% net and the Land bank facility settled within three weeks of the Credit Submission.

If you are in need of assistance in order to secure development loans for your project contact us now!

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