Senior Debt loan $1.3m for Business Working Capital to Assist With Purchase Of A Business Asset From A Business Partner

Senior Debt loan $1.3m for Business Working Capital to Assist With Purchase Of A Business Asset From A Business Partner

BACKGROUND

Development Finance Partners (DFP) was engaged to provide a cash out facility for business working capital to buyout an exiting business partner. The cash-out was against unencumbered land in Tasmania and construction funds to complete some projects under construction.

The client has been a long standing client of DFP for the past 15 years and has successfully completed other projects that funding was arranged and delivered by DFP.

 

THE KEY ISSUES

  • The client provided unencumbered sites, sites under finance and partially commenced building sites located around Tasmania as part of business restructure.
  • Due to the nature of payouts, several parties were involved to be refinanced.
  • Limited appetite for cash-out / construction facilities for Tasmanian located properties. Majors only funding mainstream loan products.
  • The outgoing Business partner keen to progress the exit asap.

 

DFP‘s ROLE

  • The client provided DFP with an overview of funding requirements.
  • DFP then, together with the client, worked through a projected feasibility and funding cashflow timeline as was required, to meet the objectives of the outgoing business partner.
  • Once a funding structure and outline was agreed, DFP provided the client with proposed terms via its service agreement.
  • DFP was formally engaged by the clients under the service agreement. 
  • DFP held several informal discussions with Capital underwriters to gauge interest. A long time and proven capital partner agreed to work through and issue terms for the client.
  • DFP immediately then prepared an executive summary for the Capital Underwriter
  • The Capital Underwriter subsequently issued a indicative loan approval, which resulted in loan documents being prepared and executed by the client.
  • DFP maintained constant contact with both the client and the underwriter to keep the matter moving forward. 

 

OUTCOMES

  • The Capital underwriter issued terms, loan documents.
  • Documents have been signed and returned for certification for settlement 27/7/2020.
  • The client is delighted with the outstanding results delivered again DFP.

 

THE RESULTS DELIVERED

  • Finance – Secured, Terms Agreed, loan documents issued.
  • Loan Amount $1,300,000 Cash out – business purposes
  • Term – 12 months

 

WHAT THE CLIENT SAYS

“I have dealt with Bronko Kozel, Baxter Gamble and the DFP for over ten years, and cannot recommend them strongly enough.

The world of commercial construction finance can be a torrid territory and to say it is always smooth sailing would be an untruth. But as for outstanding results, genuine integrity, and to do business with some really good people, these guys are my “default space” each and every time, and equally nail it, each and every time.

Sometimes the news along the journey is not what you want. But what I have found each and every time is that they are true to their word, speak a language that is decisive and factual without insulting or discouraging (tough love you might say), and can come through with the goods no matter what the challenge. They never give up on a deal (or people) they believe in, and that is one of the traits I respect without qualification.

Whats more impressive than this, however, is their follow-up service, above and beyond. You are not a client for one deal, but a client for life. For many I have met, it’s simply a case of getting the deal across the line, take the money and run. DFP, however, take the commercial lending space to a respectful and more kind place.

Outstanding performers.”

Andrew McCullagh

 

“Red Panda Group was a newly formulated outfit building off the back of a company split/restructure, and taking over other long term development operations.

Combined with a company buyout and partly constructed dwellings, Red Panda required a less than “normal” arrangement. 

What was required was a complex facility, including three separate company entities, various trusts, construction finance, cash-out and a further facility that provided working capital and paid out the previous director, most of which was secured on the back of substantial unencumbered land holdings.

The persistence and understanding afforded by Bronko and DFP was outstanding. 

Understanding the structure was complex enough, but to add to the scope of the facility with the drawdown segment and then flexible repayment arrangements was another level again. Additionally, our drawdown matters were completely random, repayment arrangement needed flexibility and the ultimate facility was fantastic. The lender flexed the arrangements to a 6 and 12 month arrangement, with the additional 6 months interest returned if settled in the first half of the loan.

Flexible, professional, friendly and passionate are words I would use.

On the back of this facility, the confidence and flexibility afforded to the  Red Panda Group, has seen it secure over $3.5m sales contracts in the 4 weeks since settlement ( 9 contracts total).

A fantastic finance partner in every sense of the word.”

Red Panda Group

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