Lvl 29 Chifley Tower, 2 Chifley Square, Sydney NSW 2000
info@acumenfinance.com.au
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+61 02 9238 4218
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Case Study

Christmas Eve Approved First Mortgage Loan $280,000

On Christmas Eve we approved a first mortgage loan of $280,000 secured by an unencumbered residential property in Perth via a self managed super fund lender, the request was received at 10 am then by 11 am with the commitment fee paid of $2750.00 Acumen then had the facility unconditionally approved.

Acumen then directed the lenders lawyers to prepare the transaction documents immediately and arrange for a settlement via PEXA that afternoon before C.O.B.

The interest rate was approximately 1 % per month or 12 % p/a. The minimum amount of interest payable was equal to 2 months.

This was a great outcome for the borrower who had no chance of any assistance from a financial institution at that time of year and with the limited financial documentation provided.

This was a great outcome for the self managed super fund lender (sophisticated investor) who was able to get 3 - 4 times the return for parking cash in the Bank in term deposit or high interest accounts.

Problems

  • Bank Declined Mortgage Loan. Because the borrower needed to remit money to his offshore company for growth. This was deemed too risky

Solutions

  • Based on our loan to value calculations and the borrowers demonstrated acumen and track record locally and overseas, We contacted private underwriter who approved the loan in 30 seconds

Result

The private first mortgage loan was the perfect outcome from our Peer to Peer commercial mortgage platform matching the transaction almost in real time.

LVR Servicing Interest Rate Security Valuation
75 % On Compeletion 15 % P/A Registered First Mortgage settled via Pexa None Required, RPData and other evidence was sufficient including a recent bank appraisal
Case Study

Christmas Eve Settled loan of $1,050,000

Also on Christmas eve we settled a commercial first mortgage bridging loan of $1,050,000 secured over a factory warehouse in a modern industrial estate based in Adelaide in which we had been formally engaged to raise the capital 4 days earlier.

Acumen then directed the lenders lawyers to prepare the transaction documents immediately The company requesting the funds was a dynamic and rapidly growing electronics conglomerate who had Asian trading partners that needed to be paid to keep the work in progress and inventory flowing.  and arrange for a settlement via PEXA that afternoon before C.O.B.

We were able to fund this loan via a private corporation that is backed by a Sophisticated investor being a Sydney Based Family office. We achieved a much higher LVR being 85 % of the properties value based on a First Mortgage and a company charge over the borrower.

The Lender did not need to undertake a formal valuation as they were able to get comfort based on the commercial merits of the transaction and having Acumen assist in the underwriting process to answer and questions and assist in prudent loan structuring to accommodate the shorter than normal time frame to complete the transaction.

Problems

  • International business that is growing and owns commercial property. Has signed contracts from government and blue chip companies and needs cash to buy material to start scheduled jobs

Solution

  • Acumen works with Ultra High Net Worth investors who invest in private direct first mortgages as part of their fixed income strategy for high yielding cash flow with low downside risk due to holding security. This was a higher LVR Stretched Senior Mortgage Loan

Result

The Mortgage was able to be settled within hours of the mortgage security documents being created electronically and settled through the PEXA system.

LVR Servicing Interest Rate Security Valuation
85 % Monthly 13% P/A Registered First Mortgage and General Security Agreement over Company None Required, desktop and lease value was sufficient
Case Study

$95mill Construction Facility in Perth

The progressively drawn loan, covered 100% of Total Development Costs. 

The borrower was a property development consortium that was outside of bank appetite due to size of the development and risk appetite.

The underwriter was an investment partner of Acumen based in Asia.

Within 20 days of having the transaction Acumen had the facility approved and waived a number of DD items due to its ability to discern the commercial merits of the transaction very quickly.

Problems

  • Declined by Bank due to capital allocation limits and regional limits

Solution

  • Acumen was Lead arranger in conjunction with a special situations fund based in Asia who invested in Australian mortgages

Result

Higher LVR Commercial Loan that even allowed Cashout for development management and achieved 100 % of Total Development Costs

LVR Servicing Interest Rate Security Valuation
75 % On Compeletion 15 % P/A 100% Of Development Cost None Required, physical inspection by investor was sufficient
Case Study

$33,000,000 Settled in 4 days

After depositing $5M towards a property development project, a Borrower that was a long term customer of a major Bank had their finance offer rescinded a week before settlement.

The primary reason was the banks had crossed an internal risk threshold for commercial investments in a specific region, based on risk thresholds calculations.

The developer was at risk of losing the invested $5M deposit and being sued for damages for not completing the contract.

Problems

  • $5M deposit paid on a prior conditional approval from top tier bank
  • Bank says “No”
  • Developer at risk of losing his $5M deposit

Solutions

  • Acumen put together a short term lending solution through an ultra high net worth individual/company
  • Lender received 18 % P/A for Investing the capital to write the loan

Result

The four month facility for $33M allowed the borrower to complete the purchase and Acumen refinanced the borrower back to another major Bank that wasn't having the same policy and capital allocation limit within 60 days.

LVR Servicing Interest Rate Security Valuation
76 % Capitalized 18 % P/A 1st & 2nd Mortgages over property None Required, physical inspection by investor was sufficient
Case Study

20% LVR Bank cannot fund for existing client of 15 years

A land banker who had just developed 300+ residential subdivision lot in Brisbane, Gold Coast area was in a sell down mode (selling completed properties).

He needed an extra $1.725M to undertake a second development application for subdivision on his land holdings separate to the completed titles being sold, This land an asset that had a value of $10M.  

The bank that had the relationship with this land banker could not fulfil this loan requirements any further despite a long history of repayment.  

Problems

  • In sell down and a down market during banks can vary lending criteria
  • Bank had established a target of 10 sales/month and the borrower was clearing at 8 sales / month
  • While the LVR of (25.00%) is attractive, the bank is unwilling to lend to this client till the sales clearing criteria are met

Solutions

  • Provide a first mortgage against the registered property
  • Reduce the lending risk with a second mortgage against all the other properties the bank held
  • A loan facility for 12 months with interest capitalised at 12%

Result

The land banker was super thrilled because the cost of not doing this deal was greater than the interest with the net value created on completion of this project. As the interest was capitalised it didn’t impact his cash flow for a year. The land banker added value to his asset base, while operating with average interest rate of 7% across all the borrowed funds. He was able to exit the loan in 8 months and the bank’s commercial manager continue to maintain relationship with the land banker.  

LVR Servicing Interest Rate Security Valuation
25 % Capitalized 12 % PA
  • 1st mortgage over land
  • 2nd mortgage over land and buildings
  • 10m
  • $4m
Case Study

$4,200,000  First Mortgage – 110 % of Purchase Price - Englobo Land, Rescindable Contracts and Receivers In Funding

A land developer, owner of an englobo had over the course of 10 years purchased a number of parcels, many hectares - enough supply for two decades!  

Total purchase price of $44M. It was a rezoning play for him and he had invested into rezoning applications.  

He sold the entire future precinct to another developer, who purchased it for $120M under option in 3 stages and staggered over 5 years. He (the land developer) received $30M for the first lot, and before the second year the option holder (purchaser) become insolvent.

This nullified the option agreement and the lot he sold for $30m was back on the market. One fifth of this land was with receivers when he engaged us.

Ability to get funding from the banks was near impossible based on RP Data and GFC like market conditions.

Problems

  • High risk with one land developer in receivership after first lot purchase in this regional township
  • While the LVR of over 100 % of purchase price required Acumen was still able to structure the deal to make it commercially balanced and attractive to a private underwriter / Joint Venture Partner

Solutions

  • Buy the block from receivers for $4M (a $26M uplift)
  • Bundle a second mortgage over the other 4 lots
  • Reduce the risk to a private lender with a rescind-able sales contract with the ability to purchase all 5 lots in the event of default for approximately $4M.

Result

With an exit strategy of a rescind-able contract we were able to structure the deal for a Joint Venture. A rescind-able contract, allows a Joint Venture partner to have more fundamental control of the property in the event of default. This is because the Joint Venture partner will OWN the property and is not tangled in messy receivership, then can make his own commercial decision about the future of the property. In this case, should the Joint Venture partner have taken full control of the property, they would have controlled an asset that could have yielded some 4000 residential lots over 15 years and for an investment of $4m.

LVR Servicing Interest Rate Security Valuation
35% Capitalized 18%
  • 1st Mortgage over primary security
  • Rescindable contracts to buy all the land for under 10m
None Required, physical inspection by investor was sufficient
Case Study

$1,200,000 ATO Debt and Short-term Funding

A Sydney business owner found themselves with an ATO debt and was seeking added liquidity to cover for some cash flow challenges in the business.

Banks as a policy don’t get involved in lending when ATO debts are outstanding.

The private investors understand such scenarios occur, and business can come through such challenges.

Problems

  • Traditional lenders aren’t able to fund on the back of outstanding ATO debt
  • ATO debts and other cash flow present a complex scenario for the business to deal with - needs immediate cash
  • Complex business setup to identify assets that can be lend on

Solutions

  • Identify an asset in the land owners business that was unencumbered
  • The property had zoning for cafe and was a specialised waterfront property with a rowing / boat club
  • Arrive a quick valuation based on land value

Result

The land banker was super thrilled because the cost of not doing this deal was greater than the interest with the net value created on completion of this project. As the interest was capitalised it didn’t impact his cash flow for a year. The land banker added value to his asset base, while operating with average interest rate of 7% across all the borrowed funds. He was able to exit the loan in 8 months and the bank’s commercial manager continue to maintain relationship with the land banker.  

LVR Servicing Interest Rate Security Valuation
35 % Capitalized 12 % PA First Mortgage $2.8M

Recent Transactions

A$33M
Provided bridging finance to a property development group that was divesting and acquiring assets. Clients usual senior lender withdrew their offer 5 days before settlement & Acumen Finance was able to provide the funding via a HNW individual.
A$7m+
Procured mezzanine debt funding for residual stock from an asset reconfiguration bought from receivers

A$10m+
Refinanced residential and commercial property portfolio to release working capital for a start-up business
A$3M
Refinanced commercial property for succession planning and equity release using an LVR of 75 %

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