Our client was in partnership with two other individuals to develop a mid-sized residential real estate development in Sydney. Due to rising costs and delays, our client was required to provide more funding to complete the project, which was 85% complete. The senior lender was not willing to extend further funds, and our client had insufficient liquidity to make their required contribution.
Limba was able to quickly analyse the situation and provide a term sheet. Our client received funds within two weeks of first approaching us. The security provided by the client consisted of a second mortgage on the development property and a second charge on the borrower’s private residence. The $350k loan had a maturity period of 12 months, and an interest-only payment structure.
Limba Finance quickly developed a loan structure that was acceptable to the client and his partners, that also worked within Limba’s credit policy. The Limba Finance team analysed several factors such as the track record of the developer, local market conditions, many other factors. We were confident that the funds lent would be sufficient to reach practical completion, and that there would be strong demand for the apartments being constructed. Limba Finance was able to provide funding even though the development and borrower primary residence already had first ranking mortgages secured over them. We were also able to rely on the ‘as complete’ valuation, rather than the valuation of the incomplete development.
