In the Australian Financial Review today, “Westpac has stopped lending to SMSFs wanting to buy property in response to growing credit and market risks, regulatory pressure and funding costs” and we are happy to confirm Prudential Finance has SMSF finance available through our investors and private lenders.
Self Managed Super Funds Funding
Call 1300 550 669 or complete to online form at the bottom of this page to discuss your SMSF funding requirements.
Prudential Finance has provided professional finance services for over 16 years and we look forward to hearing from you about your SMSF loan needs.
Once we have solved your SMSF funding, you may be interested in viewing our property investment video click here
Interest rates start from 7.75% per annum and we can lend up to 70% of the property valuation (terms & conditions apply).
Multiple Funding Channels for Property Developers are Imperative
The vast majority of developers we help obtain Construction and or Development Finance tend to focus only on private funding solutions as it has been a reliable way to efficiently source funding.
We are seeing an increasing number of new clients who have historically relied upon bank funding who are now migrating over to non-bank lending. Its no surprise that bank funding has become increasing difficult due to pressure from regulators which is heavy publicised and hence a shift to private funding.
I think its important to have a mixture of both bank and non-bank funding channels/relationships in place at all times. This is a common conversation we have with new and existing clients.
There are several pros and cons of bank and private funding such as interest rate, timeframe, pre-sales, LVR differentials etc, etc but to me no matter what cycle we are in, building robust relationships and having multiple options with both Bank and Private Funding will be paramount to developers who have or are working on building a healthy pipeline.
What I do know, is the landscape is continually changing and either you adapt or you fall behind as the future is unknown. Most developers may already have coverage from both sides but we continue to hear otherwise and wanted to reiterate our view in event we can help someone who may be thinking about this.
“Prudential Finance does not provide financial product advice and does not hold an Australian Financial Services Licence. Prudential Finance recommends that investors consider their own objectives, financial situation and needs before proceeding with any investment and seek professional advice. All information contained within this Website is specifically structured for corporate, business, commercial, construction clients, wholesale and professional investors.”
It is only a matter of time when the property cycle peaks, plateaus and then falls and development site values start to crack.
Larry Schlesinger, Australian Financial Review writes:
“Metropolitan development sites values, which have surged in recent years on a wave of Chinese money, are showing the first signs of correcting after developer Nicholas Smedley secured two sites at discounts of 30 per cent or more after vendors rejected his original off-market offers, thinking they would get more through a public campaign.
Chinese buyers have quit the market in droves, and off-the-plan sales rates have slowed drastically in Sydney and Melbourne meaning the building boom is starting to wane.”
Prudential Finance established 14 years has proven relationships with development finance lenders and investors who are interested in providing funds for property development finance Sydney Melbourne Brisbane.
Our private lenders/investors can lend up to $50M+ on senior debt (1st mortgage) and mezzanine (2nd mortgage) or preferred equity (Equity in development company). read more
Prudential Finance is also seeking opportunities to directly invest or loan funds in quality projects. If you have a development project or commercial real estate requiring funding call Prudential Finance.
Mezzanine finance is readily available for projects. Interest rates from 17% p.a. With Banks tightening their lending criteria and in general reducing loan to cost ratios (LCR) down to 70% or less has stressed the development finance market. read more
Investors interested in participating in property development projects or lending money secured by mortgages over real estate are invited to discuss their investment requirements. We have a number of property investment and lending opportunities coming up.
For for extraordinary property development finance Sydney Melbourne Brisbane call 1300 550 669
Development finance applications in Perth Western Australia, Adelaide South Australia, Darwin Northern Territory, Hobart Tasmania will also be accepted.
Brett Collins with over 25 years experience in Property, Development Finance, Mezzanine Finance, Joint Ventures and Private Loans will provide you with expert property development and finance advice from project inception to completion.
Development Finance Consultancy
It is important to ensure you will be able to fund a new project well before you make a financial commitment to purchase the development site.
Brett Collins and the Prudential Finance team will assist with working up the project feasibility and project cashflow budget, identifying exactly how much equity, mezzanine and senior debt is required.
Prudential Finance is seeking quality projects in Sydney, Melbourne or Brisbane to participate directly by way of joint ventures.
Brett Collins Property Development Experience
From the 1990’s and onwards, Brett acquired and completed many successful projects in the prestigious Eastern Suburbs of Sydney. Projects as diverse as; the efficient refurbishment and Company Titling of blocks of apartments, Hotel conversion to apartments and obtaining development approvals through Council and the Land & Environment Court, subsequently building high quality townhouses and apartments. Brett’s development approval for large townhouses at 26 Dover Road, Rose Bay started the Rose Bay residential boom. With a 100% record in achieving development approvals and successful management expertise in delivering high quality completed profitable projects.
For quality development finance and development advice backed by successful results, call Brett directly on 0400 646 197
Lately I have heard some very interesting definitions of what “Mezzanine Finance” means.
To clear up the actual meaning; “Mezzanine Finance” is subordinated debt with ranks behind a 1st mortgage/senior debt.
Mezzanine Finance will usually be secured by a 2nd Mortgage.
I have seen other definitions where they say Mezzanine Finance “gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full”. This is incorrect. A mezzanine lender may or may not include rights to takeover the project in the event of default although it is certainly not the definition of “Mezzanine Finance”.
Therefore “Mezzanine Finance” is subordinated debt which ranks behind 1st mortgage/senior debt and ranks before preferred equity and equity. The terms can vary from lender to lender.
WESTPAC, ANZ LEAD COMMERCIAL PROPERTY LENDING CHARGE
Westpac and ANZ Bank are the most aggressive of the banks with increasing their lending to commercial property finance (Loans) compared to other major banks, as they pump billions of dollars more into a sector offering growth but also posing higher risks.
Jonathan Mott from UBS Banking found in his new research from last year, Westpac was leading the rebound of commercial property finance (Loans) , expanding its exposure by 11.1 per cent. Following behind on an increase of 9.3 per cent was ANZ, which has been pursuing NAB’s business customers. Commonwealth bank also grew 4.9 per cent.
While traditionally commercial property lending is much riskier than home loans for banks, Mr Mott said investors should be “alert, both not alarmed” by the rapidly increased growth.
During the global financial crisis, commercial property finance (Loans) was a main source of bad loans for Australian banks despite being significantly smaller than the $1.3 trillion mortgage market. If lending standards begin to slip, commercial real estate finance (Loans) may again become an issue for the banks,” according to Mr Mott.
Westpac, which is seeking to expand its business loan book, said in its latest results that competition in commercial property finance (Loans) had intensified, but capital growth was low and income was the main driver of returns.
The increase in bank lending follows an influx of foreign capital into Australian real estate investment trusts (A-REITs), attracted by the higher yields in an environment of low interest rates.
Figures from the Australian Prudential Regulation Authority show, showed the four major banks commercial property finance (Loans) exposure was $195.6 billion at the end of March, an increase of 7.9 per cent compared to the previous year.
Commercial Property Finance is available from Prudential Finance. Through mayor Banks or through our Private Lending. Bank interest rates start from sub 6% p.a. and private lending interest rates start from $8.25% p.a.
Call Prudential Finance for private, non-bank or bank commercial property loans on 1300 550 669