Client background & challenges
The well-known property developer and home builder had successfully completed a subdivision in Hobsonville Point, Auckland, with newly titled sections that were unencumbered. However, having invested heavily into the subdivision works, the group had become capital constrained and required additional funding to move into the most demanding and capital-intensive stage of the project – the vertical construction of homes.
When approaching the market for finance, the client encountered several challenges:
- Bank reluctance – Traditional lenders were constrained in how they viewed the lending proposition. The facility was assessed as a large-scale construction loan, which banks had little appetite for, particularly given the size of the funding requirement and the fact it spanned multiple sites.
- Pre-sale hurdles – Mainstream banks required pre-sales for the houses before releasing construction funding, even though the developer already had significant equity in the land. This condition would have delayed construction and introduced uncertainty in a softening Auckland housing market, where time-to-market was a critical success factor.
- Reporting requirements – QS reports, valuations, and ongoing project monitoring demanded by banks added unnecessary costs, slowed down drawdowns, and became a barrier to efficient project delivery.
- Time pressure – With contractors and trades scheduled to begin work, the developer faced tight deadlines. Any delay in securing funding would have jeopardised the delivery programme and risked significant cost escalation.
As a result, traditional bank loans were neither attractive nor viable. The developer needed a non-bank development finance partner with the speed and flexibility to move the project forward.
ASAP Finance’s solution
ASAP Finance structured a bespoke solution that addressed the developer’s challenges:
- Different lens of lending proposition – Unlike traditional banks that categorised the deal strictly as a construction loan (and therefore applied rigid requirements), ASAP Finance approached the facility as a staged equity release.
- On-demand cashflow facility – ASAP provided a $20m loan facility that allowed the developer to draw down funds as required.
- No pre-sale requirement – Unlike mainstream banks, ASAP Finance did not require pre-sales as a condition of funding.
- No hidden costs or minimum drawdowns – The facility carried no minimum day-one advance or “minimum earn” requirements.
- Streamlined process
- No external QS reporting – milestone-based drawdowns without delay.
- Direct collaboration – ensured settlement within tight timeframes.
- Tailored loan structure – maximised borrowing capacity.
Outcomes
- Commence construction immediately, without waiting for pre-sales or lengthy approvals.
- Maintain strong contractor relationships by meeting all payment schedules on time.
- Accelerate delivery across 90 residential homes, bringing much-needed supply to Auckland’s housing market.
- Optimise capital allocation and enhance project value, achieving an end value of $33.5m against a $20m facility.
This case highlights how ASAP Finance’s flexible property development funding solutions enable developers to unlock opportunities that traditional banks cannot.