Eton Estate, Hamilton
It was the middle of the global financial crisis and finance companies were going down left right and centre when Tristan Jones, of Northview Capital, was in the market to finance what would become one of Hamilton’s premier sub-divisions.
“ASAP Finance were active in a market where everybody else was pulling out,” says Jones. “We met and ASAP Finance understood our business and our project straight away
“Other finance companies were scurrying away. The banks were onerous in terms and conditions. ASAP Finance backed us, and that first loan set up a relationship that has lasted more than a decade.”
The result of that first project was the prestigious Eton Estate in Hamilton.
Jones says that that typically some developers will shift finance to the banks once pre-sales conditions are met – although every project is different depending on size, location, scale, and whether it is consented or not.
“We often won’t go to the bank for funding even when we have the choice to do so, because the responsive service that we get from ASAP Finance offsets the additional cost. We don’t have to put up with the onerous demands around valuations and quantity surveys that the banks make.
“ASAP Finance makes a real effort to understand all the moving parts of a project and that when you are developing properties the reality is that there can be lots of draw-downs and cost over-runs. They really understand the detail and adapt accordingly. Most other financiers however, will avoid needing to understand the intricacies of what a project is all about.”
Jones says that there are occasions when ASAP Finance will fund a development right to the end.
“ASAP Finance has completed between 20 and 30 loans with our business (each loan could be a stage of a project), including funding through to stages six and seven at Eton Estate.
“We’re developers. We want to get on and do things; to build homes for Kiwis like Eton Estate. Finding a funding partner like ASAP Finance has been a real advantage because they understand our business; they are responsive in they will adapt funding to suit as the market moves and evolves.”
For example, says Jones, say a developer has a three stage sub-division and gets $1.8 million in funding approved from a mainstream bank for the first stage. All good. But in week three, the developer realises that they have sold 18 out of 20 lots and the market is clear that one stage is not enough to meet demand. Further, the business case for a second stage is compelling.
“If you go back to the bank for additional funding, they will view you as changing the loan and therefore unable to manage a project – even though success and economics is behind the decision.
“ASAP Finance, however, will see the business case. They will see that you have met the first milestone and that it makes business sense to build over a wider footprint to take advantage of the economies of scale. They will work with you so that everybody wins,” Jones says.
“That’s why we choose to work with ASAP Finance.”