Recent events have served as a reminder of the uncertain times we are collectively living through. But, it’s also important to remember the positives that we achieved together since March 2020. The sector has been lively and proactive throughout and will continue to be, once we are on the other side of this setback.
Recently, we’ve spoken with a number of business owners and property developers who are motivated to get ahead of opportunities. And we’ve been helping many of them avoid unnecessary hoops and progress with their projects.
For many small property developers, for example, securing funding through mainstream lenders is proving challenging and time-consuming. Our Merx solutions are structured for clients who don’t necessarily fit in the traditional mould: we strive to provide an answer fast, at an affordable level, and with minimal red tape.
For more on this, please have a read of our latest case studies below. And if you think one of your clients may benefit from our services, we welcome you to contact us
PRE-DEVELOPMENT FUNDING
Client Scenario: This client, a small property developer, had approximately 50 per cent of the value of their land in debt with their bank, and they needed $100k to move the consenting and planning forward. However, it was difficult for them to show that they could service the mortgage from their salary, and the bank was reluctant to provide the required funds. Soon, the client realised that the approval process would take a lot longer than expected, with no certainty of outcome; so they approached us to get things on the move.
Merx Solution: At Merx, we have the capacity and appetite to support small developers and help them seize their property opportunities. As it’s often the case, we determined that the client would be able to service and repay the debt by developing the property and selling units. We provided the $100k funding on an agreement to mortgage (a caveat on the land), to be repaid in six months.
FIRST-MORTGAGE FUNDING
Client Scenario: Also in the property development space, this client had nearly finished one townhouse development and had contracted the purchase of another site for their next development project. They needed $600k to settle the land acquisition; however, the bank was reluctant to count the sale of the property towards the client’s capacity to service and repay the loan. And their salary alone was not sufficient to prove servicing.
Merx Solution: After confirming the viability of their project, we identified that they would be able to repay the loan through the property sale, as planned. Therefore, we provided the $600k they required as a first mortgage over the new site, plus a second mortgage over the existing site that had nearly been developed. This essentially allowed them to access the equity in their existing project and build their pipeline for future development work.