Understanding the Development Game Sets Non Bank Lender Apart

Changes in Australia's banking sector has facilitated a rise in demand for alternative lending sources.

In a market where quality developers with strong track records, experienced project teams, solid asset positions and sound exit strategies are struggling to secure site finance from traditional lending sources, non-bank lenders are stepping in to fill the gap.

High equity contribution requirements and lengthy application processes, along with a lack of specialist property industry knowledge are among the hurdles for developers seeking pre-development site funding from the major banks.

In contrast, private lenders such as Supra Capital can offer a more flexible and tailored approach to developers seeking funding, offering more expedient approval processes and merit-based analysis of projects.

Supra Capital’s history in real estate dates back to the 1990s, initially as property developers and then as property fund managers, they continue to have a reliable pipeline of funds available for the right deal, minimising costs of delays and optimising equity for developers.

Managing director Adriana Zuccala says the company is increasingly tapping into a niche in the market for quality mid-tier developers “who would otherwise not achieve satisfactory outcomes from the major banks” for funding.

Zuccala says her company’s first-hand knowledge of the property development game sets it apart from traditional banking and credit providers.

“We evolved from a property development business ourselves and have been raising capital for a long time, so we understand the issues that are unique to the industry, including risk issues like satisfying requirements related to planning, environmental and heritage concerns,” Zuccala said.

“We speak the language of developers and we know how long it can take when dealing with third parties in relation to sites that might require clean up to achieve environmental audits, for example, and factor in any potential delays or requirements.”

Zuccala, a qualified lawyer with over 20 years' experience in the financial services, property and legal sectors, says Supra's specialised legal capability also sets it apart from other lenders.

“We can apply our legal expertise, in conjunction with our property development knowledge, to structure a deal that is appropriate for all parties from the outset.”

“Our point of difference allows us to anticipate and manage potential legal and property development issues that might come up,” Zuccala said.

“The level of engagement we can provide developers simply can't be offered by major lenders.”

Experienced in all facets of property from development to funds management, Supra's lending mantra prioritising “quality developers, quality locations and quality exit strategies” has seen them build a client base stretching between Melbourne, Sydney, Brisbane and major regional areas along the eastern seaboard.

Supra provides flexible and fast funding to developers operating in suburban middle markets, both larger land parcels to inner suburban in-fill sites, with loans secured by first mortgage from $5 million up to $50 million and mezzanine loans of between $2 million and $15 million.

With settlement turnaround in as little as two to four weeks, giving developers the capacity for extra equity to sustain current and future pipelines of work via the higher LVR on offer (compared with the banks), Zuccala says Supra continues to grow and develop, with repeat business a sign of customer satisfaction.

“In this sector there's no better sign of aligning interests than to be able to build ongoing relationships with repeat customers—we take pride in being able to free them up to do more projects and focus on doing what they do best.”

Click here to find out more about Supra Capital's funding solutions for property developers.

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