Our client, a management investment scheme and was looking for funding for a 69 lot residential land subdivision over 3 stages in SE Queensland.

They had approached their existing bankers however they could not assist as they wanted pre-sale cover over the entire subdivision rather than on a per stage basis which our client believed was unreasonable.

GCC was approached to provide a funding solution which would allow them to start construction immediately with no pre-sales.

Solution
GCC facilitated an approval for a land subdivision loan through a private non-bank lender which could cover the costs of the entire subdivision as one stage.

Construction on stage 1 could commence with no pre-sales required however the second stage could only commence once 50% of stage 1 was pre-sold.

Facility Amount: $11,500,000
LVR: 65% of GRV
Rate: 11.50%

Our applicant has built over 4000 apartments and town houses in the Sydney, Brisbane, Gold Coast and Sunshine Coast markets over the years.

Their principal bankers, however due to the recent economic slowdown decided to withdraw their support and call in approx $100M facility, which highlights the folly of having all their projects with one lender on a cross-collateralisation basis. They have commenced a self imposed restructure process to re-establish their business operations on a more stable diversified funding basis.

One of our clients projects required circa $30M to build 120 town houses (on a staged basis) on a property acquired by the group on the 31st July 2007.

GCC was approached to fund Stage 1 of the project ($14.1M for 52 town-houses). Subsequent funding requests for Stages 2 and 3 will follow as Stage 1 is completed.

Our client has a relationship with a project marketing firm who had agreed to purchase thirty four (34) sales totalling $10.25 million (gross) in Stage 1 with 5% cash deposits.

Solution
GCC was able to facilitate an approval for a subdivision loan at 75% of TDC through a second tier bank which accepted 5% deposits and with all pre-sales going to just the one buyer.

Senior Facility: $14,714,000
LVR: 75% of TDC
Rate: BB + 3.50%

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