28 Apr Funding Success Case Studies April 2021

Case Study 1: Retirement Village

CLIENT POSITION:

Loan (limit:             $5,150,000

Term:                       18 months

Enterprise:             Retirement Village / Supported Living

Security:                 Specialised Asset

Lender Type:         Specialised Cash Flow Lender

Location:                Mid North Coast

Bankability:           Improving

The borrower had recently constructed a premium 148-unit retirement village over 5 stages.  The village was receiving high enquiry with only a handful of development units yet to be sold.  In the interim the cash flow of the village was still in “growth” phase as the Deferred Management Fee income was substantially accruing but yet to materialise in a meaningful way (for the banks).  The client needed bridging finance to fund the gap between completed construction and mainstream banking at a point where cash flows have matured, and servicing ratio requirements can easily be met.

 

RSP SOLUTION:

Full funding requirements satisfied with a flexible security structure to enable ease of transactions when unsold development stock sold.

Exist strategy clearly defined with a mainstream bank lined up to provide the “take out” finance when minimum financial hurdles are met.

Speed to market, ease of transaction execution and significantly reduced funding risk during the transitionary phase of business growth.

Ongoing support from Robinson Sewell Partners

 

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Case Study 2: Land Bank – Property Development

CLIENT POSITION:

Loan (limit):                $12,250,000

Term:                            18 months

LVR:                              55%

Enterprise:                  Land Bank for future development

Lender Type:              Specialised Equity Property Lender

Location:                     Western Sydney

Bankability:                Improving

Time to Settlement: 16 days

Borrower’s primary business entails offshore manufacturing and wholesale importing of goods.  Recent investment and expansion (COVID driven) into direct to customer sales via e-commerce platforms to existing retail clients and their own innovative platforms have positioned the client extremely well for future profitability at the expense of current cash flow.

Secondary business is a medium-term play of land transformation via rezoning.

An opportunity to secure strategic holdings in a growth zone of SW Sydney required immediate capital to complete the acquisition.  Projected cash flows will enable a refinance into mainstream banking but the immediate requirement for capital fell outside of banking capability.

 

RSP SOLUTION:

Funding covered all transaction costs (finance fees, stamp duty) plus additional working capital to meet ongoing commitments and fund business expansion.

Exist strategy clearly defined with a mainstream bank lined up to provide the “take out” finance when minimum financial hurdles are met.

Speed to market, ease of transaction execution and significantly reduced funding risk during the transitionary phase of business growth.

Ongoing support from Robinson Sewell Partners