DFP accelerates new development equity finance process
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Tight time frames for approval and settlement mean property developers are seeking alternative funding solutions to close new projects.
Property developers are facing increasingly complex challenges, including accelerated time pressures, to secure funding and close contracts, which may not be seen as attractive or possible within the standard practice of traditional lending institutions, observes Development Finance Partners (DFP) director Matthew Royal.
Royal is seeing increasing demand for innovative funding solutions that can be delivered in quick and often seemingly insurmountable turnaround times. DFP recently completed a successful $4-million equity approval and settlement for client Reward Homes for a project in Western Sydney in a record 21-day turnaround.
DFP was engaged to provide a funding solution to both acquire the property site and secure in-principle approval for preferential equity to underpin a senior debt civil works facility.
“Our client had limited options from the traditional banking space, as it was a subdivision project. The settlement also needed to occur within three weeks – a very aggressive time frame for approval and settlement. We provided indicative approval within four days from the date we were engaged and we secured an offer of finance in two weeks,” Royal said.
DFP effectively consolidated the onerous two-step process of raising the funding required to settle the land and facilitate the construction phase – in one succinct move.
“DFP went above and beyond to meet our deadline. Not only did they provide us with a secure alternative to other funding options, they provided us with a level of certainty we couldn’t find elsewhere,” said Reward Homes director Michael McCrudden.
As property specialists DFP understands the development requirements needed for these transactions and how to execute them expediently, he added.
The DFP solution enabled Reward Homes to secure the site and to have peace of mind in knowing the equity underpinning will facilitate a senior debt facility.
“DFP is unique in that we’ve developed a high-trust relationship with our equity financiers, who will take a high-risk position and allow us to manage that for maximum ROI,” said Royal. “The only way to meet tight time frames on transactions is by having established strong and trusted relationships with our equity partners.”
For more information please visit http://www.dfpartners.com.au/