How Development Finance Partners organised a construction loan and accelerated one Developers profits
|By Development Finance Partners / Matthew Royal|
Construction Finance via non-bank and private underwriters
A substantial property developer had become frustrated with the major Banks and their inflexibility around debt coverage & construction loan with pre-sales. In a 400 lot staged residential house and land estate in Sydney’s South West, the Client had previously achieved strong take up rates during the past project Stages.
Despite this proven record of accomplishment, the major Banks still insisted on 80% debt coverage for the final stage of the project of 26 townhouses.
The Client was dissatisfied with this, as they wanted to maximise their sale prices (which is typically not achieved through pre-selling) and wanted to commence the final stage in the development immediately.
Through Development Finance Partners strong network of non-bank and private underwriters, they were able to secure a $9.0m construction loan facility for the final stage, with No Pre-Sales. The lending ratio was still robust at 64% of net realisable value.
The benefit to the Client was that they could start straight away and that far outweighed the other option of securing pre sales with a lower interest rate.
Could your next project benefit from some expert development finance? Get in touch.
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Melbourne VIC 3000
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