Funding $5m+ urgently

If you come across a deal that’s larger in size say $5m+ and needs to be urgently funded, there are a few things that’s best to be well structured and prepared in order to expedite the whole process. However it’s not to be overly rushed, in the interest of the borrowers, whilst also protects the introducing broker and lender. Ultimately a loan is only considered success when it’s funded, closed and repaid.?

So what are a few things in private lending that are flexible enough to speed up a $5m+ in need?

1. Valuation - subject to the property type, residential tends to be quicker however in this price range make sure the valuation turnaround time is well aware of to be able to meet settlement deadline. If it’s a commercial property, or even a normal house but with development potential, whereby “highest and best use” valuation is needed, it’s then not uncommon to have up to two weeks turnaround time. ?More often than not, borrowers might have had their own valuation ordered but we always encounter two challenges: the Val wasn’t done for “mortgage purpose” or the Valuer in use is not somebody we have heard of. We insist of third party independent valuation to protect all parties, by giving a fair shot for borrowers, avoiding potential dispute for introducing brokers and to protect ourselves as lender. A more commonly adopted approach is to have an existing and recognized valuation report reassigned.?

2. Asset and Liability position is another very critical aspect in private lending, and strong net asset position in property portfolio is always viewed very favorably. It’s ok if properties are owned in different structure, trusts or SPVs. In the scenario of borrower is the SPV itself, guarantor’s A&L in other forms of ownership structure definitely helps too.

3. Legal turnaround time. Lenders who have funded many loans usually have more legal representatives readily available for urgent new loan documents issuance. The extreme we have experienced is to issue a loan document over a weekend evening but we wouldn’t want to exhaust our relationship capital doing that repeatedly if we can plan ahead. Borrower solicitor however is another critical step on your way to getting funded or loan settlement. It’s not uncommon we have seen missed signatures or a long list of settlement outstanding conditions. We can rectify this with all Conditions Precendence outlined at letter of offer so borrowers can prepare in advanced (unless unforeseen circumstances or undisclosed matters identified).?

4. Lastly, and probably the most common issue in private lending, is “last minute lender pull out” or “last minute change of conditions and terms”. Many industry peers have relentlessly stress the importance of seeking lenders who have track record in delivering, and not enticing borrowers with pricing then feverishly go to raise capital via investors matching. It’s easier to raise capital for smaller size loans, but if it’s urgent and larger in size it’s always a smarter approach to seek lender who lends its own fund “balance sheet lender”.?

If you need more information on how to maximize value for your clients’ funding strategy, please reach out to us. We are open?for more business and have increased appetite in 2024!N1 offers real flexibility in private lending.

Reach out to our friendly team and speaks directly to decision makers. We control and?lend our own fund and we don't have restrictive policy. N1H currently manages about $155mil and funding sits in our account ready for immediate deployment.

N1H, as a direct lender, aims to uphold elevated standards in private lending through ethical practices, diligent governance, and a commitment to strong compliance.Have a scenario?Our friendly?team can be contacted on 1300 001 118 or?[email protected]?