18 May What’s it costing you not to take on private lending?
Over the last few months, Scott Roberts (our head honcho/fearless leader/boss man) has been prioritising speaking with our panel of private lenders and repeat clients. Checking in on their well-being, discussing post-‘Rona plans and talking generally about how they are managing their businesses through this interesting time we are living through.
The responses have been varied across the group. Some have pressed pause on all lending and projects for a while, some have reduced LVR’s or temporarily hibernated projects as a way to still do business while mitigating the perceived increase in risk, many are just being more particular with the deals they take on.
But many more are still open for business with very little variation on what they did pre-COVID19. And yes, that includes mezzanine and preferential equity players with copious amounts of cash who are looking to fund projects.
Everything old is new again.
At IBN, this isn’t new. We have seen it all before, if not worse.
The GFC blew just about everything we knew about property out of the water.
But we survived.
In fact, we did better than survive.
During the GFC, and again now, we are seeking out the opportunities and partnering with other Australian businesses and private lenders who are doing the same.
What’s it costing you not to start?
Sure, private lending is more expensive than traditional forms of funding. There is no hiding from that and nor do we seek to.
But is it more expensive than not taking advantage of an opportunity?
Is it more expensive that not starting your development?
Is it more expensive than paying holding costs on vacant land?
Is it more expensive than selling your property now at a discounted rate?
And the biggie – is it more expensive than going into receivership or declaring bankruptcy?
The answer to all of that, is no.
Looking forward.
We don’t fixate on the doom and gloom media hype – and neither do our funders, nor many property developers. They are pushing forward, looking for the opportunities, and as we speak the private lending market is flush with funds and ready to lend.
There has been no mass panic in the private sector, just an acceptance that it is what it is, and a determined focus to get on with the business of doing business.
We cannot live our lives or run our businesses based on fear. The property market, at this stage, is holding steady. In most states, face to face auctions have resumed, open houses are allowed and people are willing to work within this ‘new normal’, whatever your definition of ‘normal’ may be.
While many of us have enjoyed our little break away from the office, the easing of restrictions brings with it more opportunity for all of us to work together. In the property and finance markets, it is time to stand up, dust ourselves off and get this economic train back on track.
Need a project funded? Contact us now to get started.