balmain + commercial + big deals +
Helping a first time developer.
May 2010
| purpose | To assist with a small residential subdivision |
| loan limit | $2,450,000 |
| lvr | 65% of Total Development Cost and 60% of Net Realisable Value |
| loan term | 12 months |
| borrower type | Investor/developer |
| facility type | Progressively drawn cash advance with each drawdown subject to certification by Subdivision Engineer |
| interest rate | 6.15% per annum with interest payable on balance drawn plus an undrawn Line Fee of 0.75% of the Loan Limit |
The Benefits
Owner of a large residential allotment (previously owner occupied) in a well established Melbourne suburb secured a Planning Permit to subdivide the property into residential lots. All pre-sold. However, this was the Borrower's first experience in development. Borrower's core business was not property development/investment.
The existing Mortgagee was unable to provide any form of further funding due to the impact of the Global Financial Crisis. Balmain Commercial successfully structured, presented and negotiated the application for development funding with an alternative Lender.
The approval provided a two tranche release of funds:
- Tranche 1 - 60% project related site value with funds used to refinance existing loan and surplus funds used for working capital in Borrower's core business; and
- Tranche 2 - development funding.
balmain + commercial + big deals +
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