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.
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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.”
Navy SEAL’s 5 Entrepreneurial Leadership Lessons From 2014
Become A Better Leader
Image credit: Shutterstock
Courtesy Jeff Boss www.Entrepreneur.com 1. Shyness has a time and place — but business isn’t it.
“Cold calling” has an evil cousin named “cold emailing,” and it works. When I set out my 2014 to-do list (I don’t set goals), getting published as a writer was at the top of it (and I have no idea why because I had never written anything before). To do so, I leveraged the power of LinkedIn by blindly reaching out to a weekly contributor, throwing my pitch and voila! I repeated this approach again for another media outlet and now write weekly columns for both. 2. Time has a price.
Nowhere else is the old saying “time is money” more applicable than in entrepreneurship. Every waking moment (and sleeping moment, for that matter) for a startup founder is spent thinking about survival: how to solicit more clients, how to expand the client list, how to convert passersby into paying customers. There’s only so much time in the day, and it’s never enough.
Remember this: choose your priorities, and the behaviors involved in executing those priorities, wisely. If you know that collaborating with a group of eight people will detract from rather than contribute to productivity, find another route that you know will be effective.
Related: 10 Things Entrepreneurs and Military Pilots Have in Common 3. Be bold. Be swift. Be gone.
Every mission in the SEAL Teams had three things: a goal, a means to execute that goal and the end state of what that goal should ideally look like. In other words, our decisions and actions boldly identified an objective, swiftly executed and then quickly moved on to the next one without looking back save for lessons learned.
You know what? An entrepreneur’s day to day is no different. Every thought, every intention, and every behavior has a purpose and a consequence. Be deliberate in what you choose, for your choices become your creations. 4. Don’t have the fights outside the meeting room.
Adjourning a meeting only to have random individuals move to offline discussions and pose questions they never asked during the meeting completely defeats the purpose of an agenda and shortchanges everyone else involved. Moreover, it adds unnecessary time impediments to an already busy day. Instead, discuss difficult issues in the moment. Nip them in the bud before they evolve into something catastrophic. Then go do it. 5. Keep a “dear diary.”
Chances are you will never hear this again from a former Navy SEAL. Consider maintaining a running log of leadership or performance lessons learned using apps such as Evernote or Any.do to capture insights gained while “in the moment.” You can always review thoughts or sayings later if they’re recorded, but trying to recall them out of thin air is only as good as your memory allows.
Making frequent “course corrections” along your entrepreneurial journey is more effective than larger ones less often. Stay on point by learning from the past (yours and others’) and applying the best judgment to wield value in the year ahead.
Re-post courtesy Prudential Finance you development finance partners and private lenders based in Sydney telephone 1300 550 669
Prudential Finance short term funding – property loans, are classed as asset lend loans, where the real estate value is the key factor in raising the loan.
Prudential Finance are Short Term Funding specialists for Property Loans.
No matter whether you have many credit defaults or are in Administration, Receivership or Liquidation. Prudential Finance may be able to provide you with short term funding to payout all debts and enable you to refinance with another lender.
Are a specialty for Prudential Finance, no matter whether you have credit defaults, have been placed in Administration, Receivership or Liquidation, Prudential Finance may be able to assist you refinance with our private funders.
Credit Impaired Loans
Prudential Finance has provided finance offers to companies in the late stages of being wound up by Administrators, Receivers or Liquidators in the past.
We offer debt workout consultation services for clients in need of finance and or equity structuring to payout lenders.
Loan amounts from $1M to no upper limit.
Call Prudential Finance today for an obligation free, confidential discussion 1300 550 669.
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
HOUSING AND APARTMENT STARTS TO HIT HIGHEST LEVEL SINCE 1994: HIA
According to the Housing Industry Association, more new houses and apartments will be started this year than in any 12 months since 1994.
2014 will have the second highest number of new starts on record, with over 18,000 new homes being started. The HIA’s national outlook for autumn and winter points not only to the strength of the recovery in housing but also to fundamental changes in the construction market.
With the consistent flow of dwelling projects in Sydney and Melbourne, 44 per cent of the new apartment starts are multi-units compared with 32 per cent 10 years ago. The HIA notes that the growth in multi-unit starts is slowing while work on traditional detached housing slowing picks up the pace. HIA predicts apartment starts will drop back down to 36 per cent by 2016-17.
Leading the current recovery is NSW with approximately 49,000 new starts an increase of 21.9 per cent. However HIA has predicted Victoria will have 47,926 starts, although this is a drop of 5.9 per cent to the lowest level of starts in the past five years.
Taking a look at the other states, Queensland will have a total of 36,335 new starts for 2013-14, an increase of 24.0 per cent compared to the highest level in six years. With Western Australia also increasing by 14 per cent with 27,852 new starts.
HIA warned that this seasonal recovery masked obstacles to Australia successfully housing its growing and ageing population over the next 20 years, with HIA chief economist Harley Dale stating, there was already a shortage of skilled labour and titled residential land within the two strongest new home building markets – Sydney and Perth.
Australia will need an average of 180,000 new dwelling started each year if the country is to sufficiently house the growing population, in comparison to an average of 155,000 new starts over the last 20 years.
Prudential Finance Development Finance will provide property developers with the winning edge in completing projects in the most timely and cost effective way.