PRE-SALE GUARANTEES FOR DEVELOPERS

Specialised construction finance for property developers

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Guarantee Your Pre-Sales & Unlock Construction Finance

Struggling to meet the strict pre-sale conditions set by commercial banks for your development project? Don’t let financing roadblocks keep your project in limbo. We offer a unique Pre-Sale Guarantee solution specifically designed to help property developers meet bank-imposed pre-sale thresholds. If your bank requires a certain percentage of units to be pre-sold before construction can begin, but you have a shortfall, we can step in to cover the remaining percentage with a cash guarantee or approval letter. This allows you to satisfy the bank’s requirements, unlock your vital construction financing, and get your development off the ground without unnecessary delays.

Cover Pre-Sale Shortfalls

Provides a financial guarantee to cover the gap between your secured pre-sales and the bank’s minimum percentage requirement (e.g., covering the remaining 10% if the bank requires 70% and you have 60%).

Access Construction Finance

Acts as the crucial element needed to satisfy bank conditions and unlock access to your approved construction loan.

Start Building Sooner

Removes the pre-construction financing hurdle, allowing you to commence building immediately.

Flexible

Delivered as a cash guarantee or an approval letter, tailored to meet the bank’s specific requirements.

Replaced by Actual Sales

The guaranteed portion is designed to be replaced by your actual on-site sales as the development progresses.

Seamless

Structured to integrate smoothly with your existing bank financing arrangements and the conveyancing process.

Who It’s For

This Pre-Sale Guarantee solution is designed exclusively for Property Developers who require construction financing from commercial banks. It is ideal for developers who have an otherwise viable project and an approved construction loan, but are unable to meet the bank’s minimum pre-sale percentage requirement to unlock the funding. If your development project is stalled due to a pre-sale shortfall, and you need a targeted financial instrument to satisfy bank conditions and commence construction, this service is for you.

Benefits

  • Start construction as soon as possible by immediately satisfying bank pre-sale conditions.
  • Avoid financing roadblocks that can lead to costly delays and loss of momentum.
  • Provides a flexible and secure solution to access the substantial capital needed for building.
  • Allows you to secure your sales as development progresses, naturally replacing the guarantee and ensuring efficient project cash flow and repayment structure aligned with your construction and sales cycle.

What You’ll Need To Apply

To apply for our Developer Pre-Sale Guarantee, you will need to provide specific documentation to allow us to assess the project and meet verification requirements:

  • Up-to-date financial statements for the borrowing entity.
  • CIPC documents for the borrowing entity.
  • ID and proof of residence for the directors.
  • The Approved Term Sheet from the bank outlining their pre-sale conditions and the approved construction loan. 
  • Attorney confirmation detailing the current pre-sale status and the remaining percentage shortfall that requires guaranteeing.  
  • Signed Offers to Purchase (OTPs) for your already secured units.  
  • Proof of the percentage of bankable sales already achieved (e.g., proof of the 60% you have secured).  
  • Photos and marketing material for the development.
  • Signed Consent Form allowing us to proceed with the necessary checks and verifications.   

Frequently Asked Questions

What is a developer pre-sale guarantee?

It’s a financial instrument designed for property developers to cover a shortfall in the minimum pre-sale percentage required by commercial banks to release construction finance. It acts as a guarantee to the bank, allowing the developer to meet the condition.

How does it help unlock construction finance?

Banks require a certain level of secured sales (pre-sales) to mitigate their risk before funding construction. If you haven’t reached that level, our guarantee covers the missing portion, satisfying the bank’s condition and enabling the release of your construction loan.

What percentage of pre-sales can you guarantee?

We can guarantee the percentage shortfall needed to meet your bank’s specific requirement, for example, the remaining 10% if your bank requires 70% and you have 60%.

When is the guarantee repaid?

As you achieve actual sales of units during the construction and marketing phase, these new sales gradually replace the portion that was guaranteed. Once the guaranteed portion is replaced by actual sales, the guarantee facility is settled according to the agreement.

Do I still need bank approval for construction finance?

Yes, our Pre-Sale Guarantee is a tool to help you meet a condition of your existing or pending construction finance approval from a commercial bank. You still need the bank’s overall approval for the construction loan itself.

APPLY FOR PRE-SALE GUARANTEES

 

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Pre-Sale Guarantees

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