Finance Broker

Photo: renjith krishnan / FreeDigitalPhotos.net

As part of 77 Great Estates’ concierge service, our firm may introduce you to a finance broker who specialises in brokering project funding.

Generally speaking, the majority of funders’ criteria sits within the following brackets:

– Worldwide locations considered (inc. resent deals in Africa, Iran, UAE, Europe, USA, etc)

– Minimum Investment US $5,000,000

– No Maximum

– 50% – 70% of GDV (certainly above this level and up to 100% of GDV has been considered in certain cases, with firm exit strategies or additional security)

– Senior debt, preference.

– Equity considered, but more difficult to achieve, exceptional projects needed.

– Due diligence fees (independent site visits, legals, etc) in most cases are applicable and would need to be paid directly from sponsor to funder.

– Prefer site owned (where applicable)

– Identification of a clear exit (i.e. pre-sales/ pre-lets, etc)

– Sponsors with a relevant background & experience (appointed alliance partners where appropriate)

– Sectors; Property, (leisure, resorts, hotels, residential, office, etc), Mining, Renewable Energy/ Waste to Energy, Technology (Telecomms, Aviation, etc)

The process would usually involve:

Review of the outline project, data capture filled in

Queries raised and presentation prepared for potential funders

Confirmation of appetite and agreement of NDA, attached and brokerage fees (only payable upon successful delivery of funding)

Further documentation requested to progress to formal lending terms with relevant funder (typically this can take 1- 3 weeks depending on the funder/ type of project etc)

Progress to DD and completion of funding, processes differ depending upon funder

The following is an overview of the individual funders:

Fund 1 – Worldwide, with the exception of US

– Minimum $25m, no maximum at this time.

– 100% of development costs.

– Project must be “shovel ready”, new construction/development, viable, and in need of at least $25m.

– No casinos, though these can be planned in later phases – the casino cannot be mentioned in the Executive Summary or Pro Forma to be submitted or the file will be rejected. No nuclear projects.

– Multiple projects CAN be combined into one funding request.

Fund 2 – Emerging Markets (Africa, China, Latin America, South Asia and South East Asia.)

– Typically invest between US$10m and US$50m of equity capital.

– Preferred sectors office, residential, industrial, hotel and retail space, either at the project or corporate level.

– While the main opportunity in the emerging markets is of a development nature, the fund will also acquire single assets or a portfolio of assets.

– The fund places considerable emphasis on sustainable development – not only with respect to energy efficiency and other aspects of building design and construction, but also quality developments that last and improve the quality of life in the communities they touch.

– Response usually within 1 month.

Fund 3 – Five Star Leisure Resorts – Worldwide

– The Fund owns and manages a chain of 5 star properties, based in the Middle East and Asia, they look for developments in the leisure sector that can be revamped and re branded to an ultra high level. They would have particular interest in the Caribbean and South America.

– Response usually within 1 month.

Fund 4 – Affordable Housing – Worldwide

– They are actively investing in local government approved affordable housing schemes.

– Worldwide.

– Response usually within 1 month.

Fund 5 – Developments – Worldwide.

– Fund based in BVI with a UK parent company.

– 100% of development costs. Up to 100% of acquisition has been considered with additional security or firm exit strategy – prefer land owned.

– Minimum c£10m, No maximum.

– All project sectors considered, preference to property based projects.

Fund 6 – 95%.

– Worldwide.

– $20m to $1bn.

– 95% LTV for most new projects.

– Interest of 5% or less.

– No JV component, unless you ask them to invest with you then up to 20% can be converted into equity.

– Debt repayment only required when project generates income.

Fund 7 – 100% Equity Fund.

– Minimum Loan Amount: $25m.

– Rate: No interest payments, true equity.

– Term: Based on the size of the deal.

– LTV: 100% of costs (project must be unencumbered, or debt being repaid by the Equity request).

– Equity Participation: 45%

– Response usually within 2 weeks.

For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77GreatEstates or info@77GreatEstates.com.

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