“The road to success is always under construction”… and we’re here to finance your success!!
Total Development Cost (TDC) based Property Development Finance refers to traditional development finance sourced via Banks and major institutions, wherein the bank will lend a percentage of the actual total development cost of the project up to a maximum of 80% and the property developer will need to contribute a minimum of 20% as cash or equity. When the TDC method of finance is used the developer will need to provide 2 to 3 years financials and tax returns and mitigate risk by obtaining pre-sales in order to draw down the funding.
At ACG we have sourced the cheapest rates available in the market place and can offer you rates which start at Bank Bill Swap Yield (BBSY) plus 1.25% to 3.50%, with typical pricing being in the range of BBSY plus 2.5%.
ACG TDC Development Finance is best suited to property developers with sufficient cash and or equity to contribute to their project, who are looking for a cheaper price point to meet their needs.
Below is a simple example of a funding table for an ACG TDC Development Finance facility:
| Gross Realisable Value: | $17,000,000 |
| Land Cost / Value: | $ 6,000,000 |
| Construction Costs: | $ 6,000,000 |
| Total Costs (ex interest): | $12,000,000 |
| Construction Period: | 18 months |
| Interest Rate: | 8.5% pa |
| Presales: | $10,000,000 |
| Hard Costs | Total Costs | Developers Equity | Total Loan |
| Land at Cost / Valuation | $ 6,000,000 | $ 3,000,000 | $ 3,000,000 |
| Preliminaries | $ 200,000 | $0 | $ 200,000 |
| Council Contributions | $ 140,000 | $0 | $ 140,000 |
| Professional Fees | $ 120,000 | $0 | $ 120,000 |
| Construction (or subdivision) Costs | $ 6,000,000 | $0 | $ 6,000,000 |
| Construction Contingency | $ 300,000 | $0 | $ 300,000 |
| Sub Total | $12,760,000 | $ 3,000,000 | $ 9,760,000 |
| Soft Costs | |||
| Marketing Costs | $ 150,000 | $ 150,000 | $0 |
| Sales Commissions | $ 300,000 | $ 300,000 | $0 |
| Stamp Duties | $ 100,000 | $ 100,000 | $0 |
| Sub Total | $ 550,000 | $ 550,000 | $0 |
| Interest | $ 500,000 | $0 | $ 500,000 |
| Total Development Costs | $13,310,000 | $ 3,550,000 | $10,260,000 |
***Please note that rates and figures used are for illustrative purposes only, any actual transaction will be priced according to the specifics of the project.
ACG TDC Development Finance can be summarised as follows:
- Available maximum loan of 85% of TDC;
- Property developer needs to contribute a minimum of 20% cash or equity to the project;
- Presales are required;
- Full Financials are required
Contact ACG today to learn more about TDC Development Finance!
Download our Development Finance inquiry form