Lvl 29 Chifley Tower, 2 Chifley Square, Sydney NSW 2000
Main Email:
cl@acumenfinance.com.au
Drop us a line anytime!
cl@acumenfinance.com.au
Drop us a line anytime!
+61 (0) 2 9238 4218
Monday-Friday, 9AM - 5PM
Monday-Friday, 9AM - 5PM
A very experienced developer approached his bankers of 30 years to fund his projects. As he is a builder developer not only was the bank expecting an onerous amount of loan conditions to be satisfied, but also wanted to lend on a LVR of 60 % of TDC and also take away the project management fee’s as they felt at their discretion they were able to do so.
We were able to provide progressively drawn construction facility of $42M and the borrower was also able to recoup invested time by having invoices for development management fee’s immediately released.
The Property Developer who is also the builder were able to recover the internal costs and the facility was based on a quantity surverys report.
The Developer was also able to keep the project moving which saved any commercial problems with their pre-sales and sunset dates to make the transasction go smoothy and got a needed cash injection based on costs to date already spent.
Borrower an owner occupier of land with a large industrial shed needed some bridging finance from a private mortgage lender. This was because the cashflow of the business was based on lumpy contracts that underpin cash flow. So the ability to get their mainstream bank to release any further funds for business expansion was not possible.
This was not a problem for Acumen Finance as the site is within a zoning pocket that allows residential development. Based on our assessment of the development merits of the site we raised a private first mortgage facility with a private lender known to Acumen Finance who was based in Sydney.
The Business got its cash injection secured by a registered first mortgage from a private lender who was based in Sydney.
The interest was capitalized so the cashflow of the underlying business was no longer constrained and the private mortgage lender also provided additional funds to lodge a development application based on the zoning being suitable for a highrise style development. This increased the value of the property substantially and the borrower was refinanced back to a bank within 12 months.
The borrower has secured a purchaser for a new service center that they are developing in an infill area close to the city and directly off the main highway. Challenge was that the purchase is subject to a DA being approved on the purchaser's preferred terms.
Acumen Finance was able to read between the lines from a planning perspective despite NO current approval and discern a worst case value based on current zoning. In addition, the borrower also pledged some other property security.
Despite the borrowers experience the mainstream lenders were not willing to fund. Acumen was able to secure the finance within a few days of having the application with a third tier private mortgage investor based out of Sydney,
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 the approval of the development application.
The private mortgage lender went on to provide further facilities to assist with some of the borrowers other similar projects as they saw that the client had a strong history of getting zoning changes approval and material changes of use.
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.
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.
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.
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.
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.
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% p/a 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.
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.
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.
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.
Higher LVR Commercial Loan that even allowed Cashout for development management and achieved 100 % of Total Development Costs
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.
The Mortgage was able to be settled within hours of the mortgage security documents being created electronically and settled through the PEXA system.
The private first mortgage loan was the perfect outcome from our Peer to Peer commercial mortgage platform matching the transaction almost in real time.
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Lvl 29 Chifley Tower, 2 Chifley Square, Sydney, NSW 2000 Australia