Example scenario — illustrative of the commercial finance situations Emet Capital is positioned to support. Not based on a specific client matter.
Location: Rose Bay, Eastern Suburbs of Sydney
Borrower type: Boutique property developer
Industry: Luxury Residential Development
Introduction
Rose Bay, one of Sydney's most prestigious coastal suburbs, has seen consistent demand for luxury residential projects. Developers working in this market often face tight deadlines and funding gaps that banks can't move quickly enough to fill.
This illustrative scenario explores how a boutique Rose Bay developer could use a private bridging loan to secure settlement on a prime site, complete a townhouse project, and work toward a planned exit. The scenario is illustrative, not based on a specific client matter. Information is general only and not financial or credit advice.
Project Background
Location: Rose Bay, Eastern Suburbs of Sydney
Project: Three luxury townhouses valued at $12m (combined)
Challenge: Settlement deadline on land purchase while awaiting sale of another project
Funding gap: $2.5m needed within 10 days
Why a Bridging Loan Was Needed
- The developer had equity tied up in an unsold property
- A bank loan application would take 6–8 weeks, missing the settlement deadline
- Private bridging finance could provide speed and flexibility where the file is complete and the exit is clear
Loan Structure
- Facility: Bridging loan secured by second mortgage
- Loan amount: $2.5m
- Valuation: Security property + project site combined value $16m
- LVR: 70% combined
- Term: 9 months (with option to extend 3 months)
- Indicative cost: Scenario-specific private lending cost, capitalised for illustration only and not a current rate quote
- Exit: Sale of completed townhouse project
Timeline
- Day 1–2: Submission of company, property, and project documents
- Day 3: Valuation instructed
- Day 5: Conditional approval could be received, subject to lender assessment
- Day 8: Priority deed finalised with first mortgagee
- Day 10: A complete file could settle within this type of timeframe, subject to documentation, valuation, legal work, and lender approval
Outcome
- Developer could secure the site without settlement penalties
- Construction could proceed on the planned timetable
- Two townhouses could sell off-the-plan within 5 months, supporting repayment
- Project margin may be preserved despite the higher cost of private funding
Lessons for Developers
Speed matters: Bridging loans may settle in under 2 weeks where documentation, valuation, legal work, and lender assessment all line up.
Equity is key: Strong property security supports higher loan amounts.
Exit must be realistic: Off-the-plan contracts provided a credible repayment source.
Legal prep is vital: Priority deeds can cause delays — engage early.
Risks Considered
- Market risk: Luxury property demand can fluctuate
- Cost of capital: Private loans are expensive if exits slip
- Documentation: Delays in valuations or deeds can push settlement dates
Conclusion
This Rose Bay scenario demonstrates how private bridging loans can help developers act decisively in high-value markets. While pricing is often higher than bank debt, the ability to secure sites and preserve contracts may outweigh the cost in some commercial situations.
Glossary
Bridging loan: Short-term finance between purchase and sale.
LVR (Loan-to-Value Ratio): Loan size vs property value.
Priority deed: Agreement on lender ranking.
Capitalised interest: Interest added to balance, not paid monthly.
Related Services
- Bridging Finance - Short-term property finance for developers
- Commercial Property Development - Development funding solutions
- Private Lending - Non-bank commercial finance options