Pre-Guarantees for Property Developers
Unlock Development Financing with Pre-Sale Guarantees
Helping you develop your properties with confidence
New Heights Finance is a finance broker that doesn’t directly provide loans. We partner with various financial institutions to offer you a variety of loan options and help you compare different products. New Heights Finance may earn a commission, which is usually a fixed percentage of the loan amount and can vary depending on the lender.
Power your project & overcome pre-sales hurdles
Developers seeking construction financing often encounter pre-sale conditions imposed by banks, which can hinder project commencement.
Why Choose New Heights Finance to Overcome Transfer Delays?
- Specialized Solutions: We connect you with lenders who understand the intricacies of property development financing and pre-sale requirements.
- Bridging the Gap: We facilitate access to guarantees that specifically address the shortfall in pre-sales, allowing your project to move forward.
- Efficient Process: We streamline the application and approval process to ensure you receive the necessary guarantees in a timely manner.
Who can benefit from pre-guarantees?
Property Developers
Secure construction financing by meeting pre-sale requirements, even with a slight shortfall.
Construction Companies
Initiate projects sooner and maintain momentum by ensuring developers can access funding.
Investors
Facilitate timely project completion and potential returns by enabling developers to meet financing criteria.
Loan Conditions
Loan Term: From 6 month to 12 months
Property Status: Bond-free, owner holds title deed
Property Value: Over R1.5 million
Maximum Loan: 50% of open market value
Interest: 2.8 – 4% per month
Cost Schedule
Property Value: R 1 000 000
Loan Granted: R 400 000
Bond Reg Costs: R 12 000
Attorney Fees: R 8 000
Initiation Fee: R 12 000
Funds Available: R 368 000 ( to Client)
Interest Rate: 2.8% – 4% per month
Once-off Costs: 3% fee
Term: 6 – 12 months
Subject to lenders Terms and Conditions at time of quote
How do pre-sale guarantees work?
Pre-Sale Guarantees are financial instruments designed to help property developers satisfy pre-sale conditions set by commercial banks for construction loans.
Key Features
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Guaranteeing the Shortfall: We help developers cover the remaining percentage of pre-sales needed to meet the bank’s requirements.
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Enabling Project Commencement: The guarantee allows construction to begin without further delays.
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Replacement of Guarantees: Developers replace the guaranteed sales with actual on-site sales as the project progresses.
Benefits
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Accelerated Project Start: Begin construction sooner by overcoming pre-sale hurdles.
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Access to Construction Finance: Secure necessary funding from commercial banks. -
Improved Cash Flow: Maintain project momentum and manage cash flow effectively. -
Reduced Risk: Mitigate the risk of project delays due to pre-sale shortfalls.
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FAQs
What are pre-sale conditions in property development financing?
Commercial banks often require property developers to achieve a certain percentage of pre-sales (e.g., 70%) before approving construction loans.
How do Pre-Sale Guarantees help developers meet these conditions?
Pre-Sale Guarantees act as a substitute for actual pre-sales, allowing developers to meet the bank’s requirements even if they haven’t achieved the full percentage.
What happens to the Pre-Sale Guarantee once construction begins?
As the development progresses and on-site sales are made, the developer replaces the sales secured by the guarantee.
THE BELOW FORM ONLY APPLIES TO PRE-SALE GUARANTEES. PLEASE ONLY SUBMIT THE FORM ONCE AND CHECK YOUR INBOX FOR A CONFIRMATION EMAIL.