Funding Requirement (Specific)

• Requirement for Payment for TDR/ Fungible FSI

• Society Redevelopment/ SRA
  - No Land available for Mortgage
  - Requirement of additional Collateral (How many times Cover)
       • One of the solutions is 'collateral free' loans offered by NBFC's and structured debt by PE funds based on net cash flows.

• Balance Transfer
  - For developers funded by PEs at Land acquisition/ Approvals stage
      • NOW Approvals are in place
      • Replacement of PE - High cost debt to Lost cost debt funding

• Last-Mile Funding

• Take over of projects through JV/JDA
  - Bring together ‘Seller’ & ‘Buyer’ along with ‘Funding’

Financial Institutions: Banks/ NBFC

• Factors causing higher ROI for RE project bank finance;
  - No industry status
  - On RBI’s cautionary list
  - Higher provisioning norms
       • Leading to banks more money being blocked

* Subject to developer profile, project stage, purpose of funds, etc.

Product Types

Transaction structuring

Transaction structuring
  - Based on factors including
     • Projects-mix (SRA/ redevelopment/ plot development)
     • Project stage (acquisition/ approval/ construction)
     • Purpose of funding (Balance Transfer/ Further payment of TDR/Fungible premium)
     • JV/ JDA funding
Transaction Terms & conditions and Documents
  - Competitive Interest Rates/Processing Fees
  - Tenure/ Moratorium/ Repayment period
       • JV/ JDA funding
  - Pre-payment charges
  - Clauses sanction letter and in final loan/DTD documents
Post Disbursement
  - Disbursement of balance loan tranches
  - Project monitoring

Lenders Perspective

Group Related
   - Project Delivery
     • Construction completed (In Square feet/ No. of projects delivered)
       •   PE (Over Million(s) sq ft preferred)
       •   NBFCs (>2/5 lacs sq ft & linked to funding ticket size)
    • Number/ Type of projects
    • Construction timelines, delays, if any
  - Sales performance
       • Past projects- Sold/Unsold
  - Credit Profile
       • Positive Credit HISTORY preferred
Project Related
   - Location
       • Tier I cities – PE/ Banks/ NBFCs
       • Tier II – Banks/ NBFCs
   - Current project’s Sales velocity
   - Stage of the project
   - Fresh loan or Refinance/Take over

Financial Closure

• Financial Closure means;
  - There is or there will be enough money or cash inflows to complete the project in all respects till OC.
• Three main sources for Financial Closure;
   I. Builders Equity
   II. Sales advances
   III. Project finance/ Construction finance
• Why Financial Closure
  - Changes in Business Scenario / Government Regulation
  - Tapering of Investor’s interest in real estate
  - Commitment of project delivery under RERA legislation
  - Impact of GST – Customer looking for ready property impacting slower sales in under construction property
      • Uninterrupted construction progress with Construction finance will provide confidence to potential customers