Clients & Results
New Zealand company Connemara, owned and operated by Tim Campbell, has developed a close relationship with ASAP Finance. From its base in Wellington, Connemara provides fully integrated property solutions to clients across the globe. Campbell says Connemara’s strength lies in its commitment to building long term relationships with like-minded organisations and leveraging its deep industry knowledge to deliver the best outcomes.
Recently Campbell and his team have been working closely with ASAP Finance to deliver a 225 Lot subdivision in Whitby, Porirua.
“Everyone’s situation is unique,” says Campbell, who worked overseas for many years, and has a long association with the construction industry. “We’re a new company with a new product so we didn’t have the track record that an established corporate would have,”.
“Yet we had a project of significant scale, which needs a significant amount of capital. Despite substantial capability within our project team it was challenging raising significant tranches of funding in the early stages of the project”.
Campbell notes that the development site was originally ex-forestry land. “When we met prospective lenders on site it was hard for them to look beyond the perceived risk of steep contours and pine trees, whereas ASAP Finance quickly quantified that development risk and moved beyond it, because they have that experience,” says Campbell.
“And with their ability to visualise the end outcome, they were able to get their heads rapidly around the project and the quality of our project team.” That approach has been consistent in Connemara’s dealings with ASAP Finance.
“They came back to us in terms of that initial deal so fast, and throughout the process they’ve been really efficient and timely in how they respond to the evolving requirements of our project” says Campbell.
He notes that, while some banks will understand what Connemara is trying to do, the development company didn’t fit inside the traditional criteria. “ASAP Finance was able to satisfy itself that our project team could deliver, which was especially important due to the complexity of the project.”
“Being able to look past the noise and identify critical issues thereby adding value to the development process is something the team at ASAP are adept at, and it’s not something you typically expect from a project lender. This is a significant point of difference of the ASAP team.”
ASAP was able to provide a loan facility using the existing presales and this enabled the client to commence work immediately. Additionally, stage one of the development was funded without a QS with drawdowns being made based on engineer reports only. Progress payments were made on the same day they were requested, ensuring all contractors were paid on time, which generates goodwill with contractors and prevents potential delays.
Campbell says that the company’s relationship with ASAP is based on transparency. “We believe that successful projects are nearly always an outcome of like-minded people working together to achieve mutually beneficial outcomes.”
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.”
Developer praises ASAP Finance’s common sense business approach
Referred by a couple of different people to ASAP Finance just before the start of the successful 58ha Flemington sub-division in Lincoln, developer Shane Kennedy says the common theme of his decade-long experience with ASAP Finance is a common-sense approach to financing a project.
“With a big project like Flemington, it’s impossible to get a bank on board, and I’m not sure a bank is the right partner anyway. Common sense is not common these days, but that’s what ASAP Finance brings to the projects we work on,” Kennedy says.
“By common sense I mean they assess the risk in the project from our point of view, and their point of view. They understand that we, as the developers, have no intention of going into a project where there is too much risk. Once we met their requirements, the draw down process was simple.”
Working with ASAP Finance now for more than ten years, Kennedy says it’s a pleasure knowing he deals with the same person, rather than somebody different every time.
“For a big project it is important, but difficult, to build a personal relationship with your financier and to maintain it, but that’s exactly how it has worked.”
ASAP Finance was there for Kennedy through the first three stages of the 570 lot Flemington sub-division in Lincoln, until the project was up and on its feet. Since then there have been other projects in Auckland and Christchurch, including the latest, Verdeco Park, which is located near Lincoln in the Selwyn District.
“It is difficult to get building projects off the ground and bordering on impossible with the banks. Even from the point of view of having to supply more security than is reasonable and 100% pre-sales, the banks only then lend up to 70% of the value – to me that is an over cautious approach that stops a lot of people from progressing with developments like we're doing.
ASAP Finance aren't high risk lenders either, but the structure of their lending makes it achievable. Our business is well set-up in the market down here, but that doesn’t count with the bank. However, as a result of our strong relationship with ASAP Finance we can pick up the phone and talk about it. They take a common sense, business approach to a deal that is good for everybody,” Kennedy says.
If there are issues, they can easily be worked through without putting anybody at risk.
“I’m still talking to the same person at ASAP Finance that I was ten years ago, and that is a comfort for me.
“We haven't had any hiccups that caused problems, but the simplicity of the funding and how they operate mitigates risk areas. Both parties work on a common-sense policy which includes good strong relationships for ten years – I wouldn’t do my projects through anybody else.”
ASAP Finance loves building long lasting client relationships and this one is no different.
SWL was introduced to ASAP in 2012 through a mortgage broker – at the time, the start-up building company was completing 1-2 spec builds per year and was struggling to scale their business in the face of stringent bank requirements.
Mainstream banks required significant experience and equity in order to approve funding and other hurdles such as presales, QS reports, valuations and fixed price contracts, were inhibiting their ability to move projects forward at pace.
ASAP Finance removed these hurdles by providing a funding package without the onerous conditions that other lenders required. Senior Lending Manager, Kevin Zhou, recalls structuring the initial loan facility for SWL.
“We took a practical approach when assessing their funding requirements. We removed constraints such as valuations, QS reports and presales, and introduced loan facilities that optimised the limited equity they had available. This enabled SWL to accelerate development programmes and scale their business to a level that would not have otherwise been possible”.
For SWL same-day ‘drawdowns’ for progress payments were an important aspect of the ASAP funding model. “The draw down process was extremely quick – it would only take 24 hours for funds to arrive after submitting a payment claim. The ability to pay sub-trades immediately can have a dramatic effect on whether they prioritise your work” says the director of SWL.
Since 2012, SWL has almost exclusively used ASAP Finance to fund their projects. As the relationship has progressed, SWL has gradually scaled their business to a point where they currently have 20+ houses under construction and a further 20+ houses in the pipeline. They are now one of the largest spec builders in Silverdale.
SWL has had one point of contact at ASAP Finance (Kevin Zhou) who has been responsible for managing every aspect of the loan life-cycle. The relationship has been built on trust and transparency. “The ease we encounter when working with ASAP means a seamless journey from day one” notes SWL.
After 9 years of business, the original mortgage broker continues to be involved in every transaction. A close working relationship is maintained between Client, Broker and Lender. This is the perfect collaboration and benefits all parties involved, something ASAP Finance strives to do.