With projects requiring less than $10m in debt, when we present our clients with the pros & cons of Bank vs Non-Bank development finance options, it is increasingly rare for developers to choose the cheaper bank option. Why?
With this project, the developer "just wanted to get going" on this small townhouse project, with no pre-sales yet in place.
Time is particularly of the essence with these small projects, so waiting around for banks to complete an approval, and then having a few pre-sales as a hurdle, is often not worth the cost saving.
Conversely, non-bank development finance allows you to (1) get an approval very quickly, (2) start without pre-sales and, (3) require less equity in the project.