Professional Service tailored to your financial needs.
ACQUISITION & COMPLETION OF
DISTRESSED ASSET
Acquisition of a GFC-era distressed commercial-retail property development via mortgage sale, project was approximately 90% completed.
The bank appointed a Receiver to liquidate and recover bank funds - our clients recognized an exceptional acquisition opportunity.
The Problem
A small business family had successfully negotiated to acquire the distressed asset from the Receiver but could not raise the required funding because their equity was limited, financial information was not up-to-date, the property was incomplete (no rental income to support loan servicing).
They tried for 6 months; the best finance offer they got was from a private lender at 50% LVR of “as is” Purchase Price with pre-paid interest for the 1 year term at high interest rate & fees.
The LINK Solution
LINK formulated a finance solution & made a detailed the strategy plan in a commercial credit paper which was tendered to a reputable tier-2 Non Bank Financial Institution (NBFI).
Gaining the support of the NBFI’s Credit Committee, LINK successfully concluded negotiations on behalf of its clients.
The End Result
A commercial investment finance facility was settled based on a VP “as if complete” valuation; this provided the full contracted purchase price at 70% LVR on a ‘stand-alone’ security basis.
A 3-year fixed interest rate was set to manage interest rate risk. A 12 month interest reserve was allocated to allow completion and letting-up of the secured property.
Over the years, subsequent revaluations on loan roll-overs revealed a tripling of the original purchase price while the loan remained constant, providing substantial wealth growth.
The commercial-retail investment property is fully let, it is now the family’s main asset, main source of equity and main source of regular & recurring income.
OUTLINE
Loan Amount
$4,130,00
Lender
High quality, Tier-2 NBFI
Lender Exposure
70% LVR ("as if completed" Vacancy in Possession basis)
Loan Term
3 Years
Interest Rate
5.15% pa, fixed for 3 years
Lender Estab. Fee
0.75% of loan amount
Exit Strategy
Loan Roll-Over or Refinance or sell for a profit
Location
Western Sydney, NSW
