We specialise in Development Finance
Low Doc Development Finance (smaller projects)
- Non Bank funded
- We are able to assist you with the following services:-
- Help with presales
- Equity partners
- Non bank funding
- This is typically suited for smaller developers and may be suitable for developers who have not done a previous project.
Development Finance for smaller projects (Non Bank funding)
Development Finance / No Pre-Sales Required
Construction Loans are available for Full Doc and Low Doc products
- Loans up to $1,500,000 up to 70% LVR of the “oncompletion” value
- Loans up to $5m up to 65% LVR of the “oncompletion” value metro locations
- No Pre-Sales Required for loans up to $1.5mil lt
- Pre Sales may also not be required for loans over $1.5m, and if they are, the requirements will always be lower than major banks.
- Minor credit impaired is considered
- No Risk Fee
The above construction development projects typically range from 2 units up to 15 unit developments in metropolitan areas.
Institutional Funding (larger projects)
Up to 75% of total development costs on construction loans or 65% of the “on completion value, whichever is the lesser.
This is full document loan and full financials are required.
The property developer’s contribution to be a minimum of 20% cash or equity.
Developer Presales will also be needed.
Development Finance for large projects (Institutional funding)
75% Total Development Costs (Even for owner-builder), or
65% Gross Realisable Value.
Strong equity and borrower’s interest in the transaction are vital –typically 20-30% of Total Development Costs.
Emphasis on sponsor track record, reputation and experience in similar projects.
Generally requires a minimum profit-to-risk margin 15% bw
Tripartite agreement is required between lender, borrower and builder.
Retention funds of >5% of the works’ cost or a third party performance bond for an equivalent amount that is acceptable to the lender
CBD/ Metro areas (within 20-25 km of CBD).
Focus on site contamination and potential environmental risks especially where excavation is concerned: Water tables; Buried asbestos; and Foundations of neighbouring buildings.
No one entity/individual should have more than three or more units which represent 20% of total number of units; and/or 10% of total sales value.
Non-refundable deposit to demonstrate buyer’s commitment: >10% of purchase price.
No overseas pre-sales
Mezzanine debt or preferential equity
If you require further information or have a scenario which falls outside a major bank’s policy and you would like to discuss, please call us.
New Funding now available for larger projects. Minimum $20m. Call now.