Senior Debt loan $2m for urgent site refinance at 65% LVR
DFP had been engaged by the borrower to obtain construction finance for a development site located in Cheltenham that they already owned. During the process the borrower was advised by their existing lender that they would be unable to extend their existing loan term to accommodate any gap in settlement to allow construction finance to be procured and settled and that they had 6 business days from the date of the letter to refinance the site otherwise would be liable for $60,000 in default interest.
The borrower urgently notified DFP to arrange immediate bridging finance to take out the site and avoid the default interest charges while continuing to arrange construction finance in the background.
Location of Project/Site
The Group is a vertically integrated, full service property development and construction group based in Melbourne. Until recent times, the Group has operated for most part in the background on the delivery of a large pipeline of projects. The company continues to construct and develop sites and will continue to do so for a number of years to come.
At present, the developer holds in excess of 20 projects which are either ready for construction or in pre-development phase. The Group is located in Victoria and employs approximately 20 staff.
The Group strategy focuses on building and developing quality developments within Melbourne’s inner to middle ring south-eastern suburbs. Specifically, the Group will look to deliver between 6-12 projects each year predominately on mixed-use residential projects, with all aspects of the development life-cycle to be managed in-house, ranging from site acquisition, planning, sales and marketing, project funding, construction, project management and settlements.
The Issues: URGENT Bridging site finance
Following being advised the existing loan term could not be extended. There was 6 business days to arrange take out to avoid $60,000 in default interest.
The Solution: Refinance of existing mortgage with bridging finance facility
Development Finance Partners (DFP) was engaged to provide an urgent funding solution.
DFP arranged a 2-month bridging facility for $2m at an LVR of 65% approved with a new valuation completed and ready to settle in 6 business days.
The Results DFP Delivered:
- Finance – Secured; Approved with a valuation completed and settlement completed within 6 business days.
- Loan Amount $2.06m, Land Valuation ‘As Is’ $3.17m LVR 65%
- Term – 2 months
The client is now very happy that they have been able to retain their development site and avoid additional interest expenses and DFP are working towards achieving construction finance terms.
What the Client Says
“We were faced with a scenario where the existing mortgagee was going mortgagee in possession with this site and we were on notice they were going to sell. We were given one week to refinance to avoid paying default interest.
We needed a refinance within 7 days and DFP said they could assist. They procured a lender that we’d used previously on a similar situation, arranged the document, due diligence and credit approval very quickly and we managed to settle just over $2 million on time. This was achieved even whilst one of the Directors of DFP was overseas.”
Rick Impala, Director, Real Estate Finance, Pitard Group
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