There’s no doubting that over the last couple of years it has become harder to obtain bank funding to carry out property developments or to buy commercial investment properties. We understand the hurdles and can help you through the process.
We have already written about the challenges borrowers are facing in the current environment and the reasons why ( “Borrowing against commercial property – an update”).
It seems the things we talked about then have become the new norm in the world of commercial property finance, for now at least anyway. So, if you are looking to borrow to fund a property development or a commercial property purchase, you need to understand the hoops that you will need to jump through in order to secure that funding.
For instance, if you are attempting to secure finance to complete a residential or commercial development, it is likely you will have heard of things like pre-sale (or pre-leasing) coverage, quantity surveyor “cost to complete” certificates, fixed-price construction contracts, and so on.
Similarly, if you have attempted to secure finance for purchase or refinance a commercial property investment, you may have encountered loan to value covenants, interest cover ratios, weighted average lease expiry profiles, and so on.
Additionally, you may have found the bank asking for forms of security that you have not come across before, such as assignments by way of security over pre-sales agreements, leases, or construction contracts.
If this all sounds like a foreign language, rest assured, we can help you.
Here’s how we can help ….
The Property Finance experts in the Cavell Leitch Property Team are well versed at helping our borrower clients navigate over the hurdles and past the obstacles that have become the more stringent criteria banks are placing in front of them, and can help you secure that property finance you need. Here are just a few reasons why:
- We understand the language that is typical of the bank's criteria for obtaining finance for that land subdivision, apartment or townhouse complex, and commercial building that you want to build and lease or occupy yourself, or that commercial investment building you want to purchase.
- In fact, one of our Property Finance experts even worked as a property finance lender at one of the major banks, doing just these types of deals for around 6 years. Consequently, we have a unique understanding of what the bank's criteria are for obtaining different types of property finance, and what you need to do to meet those criteria, in order to get your deal over the line.
- We know many of the property finance lenders and can work with them, proactively and constructively, to work through any tricky issues that arise and need to be resolved to help the bank’s lender get the approval of their credit committee.
- If, on the other hand, your deal is in the “too hard basket” for the trading banks, we are familiar with many of the non-bank property finance lenders in the market, whose criteria are less stringent, so we may be able to help match you with a suitable alternate lender.
We cannot reiterate enough that in the continuing tight market for property finance it is vitally important that, if you are considering a property development or commercial property investment and require bank funding to make it happen, you have a good understanding of what the banks requirements are going to be, why they are there, and that you present a funding application in the very best shape possible to ensure that it is bankable. If you think that you may need some help going through that process, we can help you.
If you have any queries or require assistance please feel free to contact one of our Property Finance experts. They will be happy to discuss it further with you.
Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.