Land Bank – ($11.5m facility settled in 21 days)

Land Bank – ($11.5m facility settled in 21 days)

Sydney NSW

$11,500,000 Non-Bank loan approved and settled in 21 days. DA lodged with Council for 117 residential units with Consent Pending from Joint Regional Planning Committee.  Client had an option and needed to settle notwithstanding the Planning Risk.  Loan was secured and settled within 21 days.

Issues

• Client had an option over the site with a DA lodged for 117 units.  They had been issued with a Terms Sheet from traditional funding sources however they were dragging the chain and the settlement was due imminently
• There was a perceived Planning Risk given the Development Consent was yet to issue

Site would be on- sold by Client upon issue of the Consent by Joint Regional Planning Committee

Scope

• Development Finance Partners was engaged to deliver a finance approval and settle in 21 days.
• Complete cut-through due diligence of the Town Planning responses to Council and status of the Development Application
• Review valuation
• Build a case to mitigate the Planning risk based on the support of Council and Complying DA
• Complete due diligence on the Client’s overall financial position and other projects on stream
• Produce a simple debt / equity model with an elevated coupon to the Financier
• Identify potential Funding sources prepared to accept the mitigated Planning Risk
• Secure financing

Results

• 7 days – How long it took Development Finance Partners from initial equity to deliver a formal loan approval of $11,500,000.
• 14 days – How long it took Development Finance Partners to formally approval to the loan to settle the loan and purchase contract.
• The Funder acknowledged the underlying value of the Property with Complying Development Potential (therefore Development Consent was highly probable)
• The loan was 67% of the valuation and 92% of the Purchase Price
• Hands-On Conditions Precedent management and co-operation from all parties allowed smooth passage to settlement
• The settlement was  achieved in a period of 21 days from the Client approaching DFP