At the time the developer had an apartment project under construction, and another in the final pre-construction stage. They wanted to access some of the equity tied up in their projects, to progress on other opportunities.
Based on the equity in each project, we arranged finance within a few days, providing the developer with a ‘line of credit’ – an expected amount of cash they could secure to use as their business required to move on to the next opportunity.
“Essentially it saw a substantial amount of cash released to us that we could use as working capital, to progress on our next projects, or to use as we see is best for our company. It also lowered our ongoing interest expense considerably.
Having this cash in hand has strengthened us further as a property development business because it has allowed us to pursue additional projects. Without the ‘line of credit’ we would have been very restricted in what other opportunities we could pursue while waiting for our existing projects to complete.
This option is attractive for a property development business because traditional lenders are very reluctant to release cash directly to a borrower. Traditional lenders prefer to release funding in payment of an expense, but not as working capital where the borrower can use the cash freely. As a development business, however, it is critical that we have the cash liquidity to operate and pursue new opportunities. It is also very inefficient as a business to have equity tied up doing nothing when there are ways we could be using that cash to further grow our company and our project pipeline. This loan product is absolutely something I plan to continue to use over time as I lead our business towards our goals.”
Learn more about how to make your equity work harder for you, speak to a Dash Money Lending Specialist about your lending options.