Coffee Break

Why You Should Use A Broker For Development And Construction Loans

For developers and builders seeking finance for their next project, working with a specialist property development and construction loan broker like IBN Direct gives you access to a network of over 200 private lenders who are highly experienced in all facets of development and construction lending.

Brokers work closely with their lenders to understand the funding parameters and the specific deals they specialise in. This gives you an advantage over other borrowers – your funding scenario isn’t shopped around in a haphazard manner. A broker will work with you to structure your loan proposal and then they present it to the funder who is most likely to approve your application. Simple really.

How does private funding work for property development and construction needs?

Private funding is a specifically tailored option to your actual requirements. Working with a team of highly experienced property finance professionals ensures that your funding scenario is placed in front of the funders most likely to finance it. Private funding offers you the opportunity to negotiate directly with the lender around early repayment of the facility, extension of facility term, initial tenor and LVR.

The private funders are part of an extensive and exclusive network. They know these people and have worked with them for many years. They understand that their property development and construction lending requirements and source deals that are specific to their lending parameters. The broker will also work with traditional banks and lenders, giving you greater access to a wider panel of funding partners.

One of the most convenient things for property developers is that you don’t necessarily need pre-sales to support your funding proposal. Brokers work on an exit strategy basis, meaning they don’t need to see pre-sales/debt cover, or financials when considering an application for  property development finance or a construction loan. Brokers complete initial in-house desktop valuations and credit reporting checks as part of structuring your loan proposal. The private funder will complete their own drive-by of the site, suburb research (if they aren’t already knowledgeable of the suburb) and discussions with real estate agents around potential market appraisals and local amenity.

Property development and construction is booming in Australia. If you are just getting started, working with a commercial finance broker gives you access to a network of property and construction industry experts. It also means you are working with a team of property finance experts, led by one of the stalwarts and founders of the property development and construction lending industry.

With lending of this sort, borrowing needs to be completed in a company or trust name. Brokers in most cases are not able to assist borrowers with NCCP lending.

From a brokers or referrers’ perspective, it makes good sense to work with a commercial finance broker. They specialise in commercial loans of this nature, making it quick and easy to access a range of loan options that aren’t available to the general public. Brokers make it a simple process, one phone call or email with the particulars of the scenario gives you access to more than 200 private lenders, many of whom operated exclusively in the Australian region.