Construction Loan Product
Construction Loans Australia – Providing the best construction loan rates up to $10 million
Max Loan to Value Ratio (LVR) of up to 70%
No pre-sales required, allowing projects to start construction sooner;
Increased LVR to 75% if a few pre-sales in place
Maximum Loan to Cost Ratio of 90%, resulting in lower equity contribution from the developer
9.75% cost of funds with a 1% Loan Management Fee;
2.75% establishment fee, paid as:
$10,000 on application
$15,000 upon acceptance of our finance offer (this covers valuation, QS and loan documentation costs)
Balance paid from the loan settlement
In most cases the mortgage security will be limited to the subject property, this means we don’t tie up all of your assets
More flexible on choices of Valuation firm
Streamlined credit process, most loans we have issued an approval in 1-2 days
Credit process is focused on the property / project, rather than full interrogation of the sponsor’s ability to repay or service the loan
Easy progress claims – timeframe for payment from providing QS report and borrower declaration is typically 24-48 hours.
Example of Project Saving
20 units @ $450,000 so $9mil GR, extra funding cost is $170,000, or $8,500/unit, so let’s say you had pre-sales budgeted at 3% upfront and 3% on completion, by starting without pre-sales you would save the upfront marketing commissions on 10 units, which at 3% is $13,500 per unit, so a $135,000 project saving.
Or looking at construction, say it was $200,000 per unit cost to build, even at 4% cost increases per annum that is $4,000 per unit cost increase for the 6 month delay to secure pre-sales, or $80,000 to the project.
Case Study
10 Apartments
75%LVR / 92%LCR
Developer only required to contribute
$270,000 or 8% LCR leaving $425,000 available for investment.
