Feed: Global Capital Commercial Australia - AggScore: 28.8

Mezzanine Finance | Mezzanine Debt Australia – GlobalCapital

Property developers have always been looking for more innovative ways of funding their projects and more importantly maximising how much they can borrow - one such way is Mezzanine Finance.  In short Mezzanine debt fills the gap between the property developer’s equity available and the amount of senior debt the lender is willing to lend and is generally secured by a second mortgage.

Traditionally mezzanine loans have been supplied by specialist lenders or private investors, an area which GCC has excelled in over the years. In recent times mezzanine finance has become more difficult to place with the requirements becoming more stringent, such as 100% pre-sale cover, collateral security etc.  In response to this GCC has been working on an alternative.

Through our extensive network, GCC is in a position to source builders for appropriate well located developments who are and can not only build the project at a fixed price determined by an independent QS but are also able and willing to inject cash to cover any shortfall (as mezzanine facility/equity behind the senior lender).

Residential Development Finance – Senior & Mezzanine Finance

Our client has contracted to buy a development site in Western Sydney for $1.5M plus costs. The property is zoned for 15 x 2 bedroom residential apartments and should sell for $6.5M.  Given that it is a rising market the clients would prefer not to obtain presales as they firmly believe they will obtain better prices for the units close to or when completed. GCC was approached to arrange development finance via a private non-bank lender due to the fact that no presales would be available.

As we started working on the proposal we were informed by the borrowers that some of the investors had pulled out and they were short approximately $500k.  Traditional mezzanine finance was not an option as there were no presales.

Solution

GCC approached one of our builders who we have been working with over the years and discussed the project.  The builder did his research and agreed that the project was viable, well located and would sell well in the current market.  He further agreed to build the project at the QS price on a fixed price contract basis and further agreed to contribute the shortfall of $500k as a mezzanine loan.

Senior Debt

Loan Amount:          $4,225,000

LVR:                      65% of GRV

Rate:                    11.50%

Mezzanine Debt (supplied by the builder)

Loan Amount:           $500,000

LVR:                       75% of GRV

Rate:                      20% pa

Construction Loans & Development Finance

No two construction loans are ever the same and hence require individual financing solutions.  GCC specialise in professionally packaging development loans to lenders in the best format resulting in successfully securing your clients development finance requirements.

GCC offers the following development finance facilities:

• TDC : Total Development Cost based facilities (Institutional Lenders)

• GVR : Gross Realisable Value based facilities (Private Lenders)

• Mezzanine finance

• Equity participation

• Land bank facilities

• Take-out facilities

• Introduction to Joint Venture Partners

Residential Development Loan – Lite Doc – Private Lender

Our clients are a family which inherited a residential property on the harbor of Sydney’s Inner West.  Since then they bought the adjoining property and obtained development approval for 11 residential units which would yield an expected end value of $15.5M (Ex GST).  The clients have no previous property development experience.

There are several beneficiaries in the family consortium and the plan is to hold on to 6 units and sell the remaining 5 units ($8.75M) at completion.  As such there are no presales available.

Solution:

GCC was successful in obtaining construction finance approval via a private non-bank lender for a facility of $10.45M for a period of 18 months representing an LVR of 67.50% of GRV.

This enabled refinance of the existing land facility and provided a construction loan to enable completion of the development with no presales or financials required.

Loan Amount:                   $10,450,000

LVR:                       65% of GRV

Interest Rate:                    11.50% pa

The process is simple, send in the attached development finance enquiry form and we do the rest.

Use our business to ensure delivery of construction finance solutions to your client. Contact broker@globalcapital.com.au today

Commercial Finance | Commercial Loans | Commercial Mortgage Loans - GlobalCapital

If you are looking to grow your business in the lucrative Commercial Loans space, GCC is the best partner you could choose to achieve your goals. Commercials Loans are affected by a broad spectrum of variables, with some requiring extensive and complex structuring. This is just one part of what we bring to the partnership.

We have a highly experienced team, a proven track record and a reputation for getting deals settled. In addition we have the largest list of lenders in the country – over 200 – with established relationships, that result in higher conversion rates.

In many cases your clients may be looking to expand their investment horizons. Knowing that you can accommodate their requirements, through a partnership, will enhance your relationship with your client. You will be able to offer to a range of solutions from straight forward investment loans through to leveraged facilities including the likes of commercial mortgage loans for Commercial properties, Industrial and Retail assets, Non-Recourse Loans (no directors guarantees required), Specialised Assets loans – (hotels, motels, petrol stations, child care facilities etc.) and of course our specialty Development Finance.

 We have the expertise and the networks required to make these deals happen.

So if you want to take your business to the next level and begin to offer Commercial Finance, let’s do it together. Contact broker@globalcapital.com.au today.