How to solve the budget crunch when time delays are causing looming losses in the future. How to earn grants on capital never invested without loosing control of your capital.
There are times when things do not work out how you planed. In the real estate industry this is not too uncommon. You have planned your budget for a large project. Lets say your building a hotel.
You have applied from a lender and received a swing loan. That loan is supposed to pay for all of the construction. Because you already have a pretty solid budget you are pretty confident that the project is going to be a success.
And then for one reason or another, you are having delays in getting certain permits in order to start the project. The problem is that you now do not know how long is is going to take to get the necessary permits to begin.
Now you realize you have a problem. These delays are going to cause cost budget increases. Contractors are not going to wait, they are going to have to proceed with other projects.
Procurement is telling you that if you buy the materials now your price estimates are still good, but if you buy next year the cost are going to go up. You have nowhere to put the materials right now. The suppliers are not going to sell you the materials and then store them in their warehouse because they are using just in time procurement and manufacturing them selves. So what they sell has to be moved out of the way to make room for unsold newly manufactured goods.
You now know you budget is no longer going to
work with the loan you have in place.
That loan principal sitting in your operating account is not going to be sufficient to complete the project. Further when that capital is just sitting there in you account it is loosing value due to inflation.
Unfortunately this is not an unusual situation in the real estate development sector.
Treasurian, without blocking funds, without moving the funds or investing, can pay you a return on that capital in your account. In fact, they will contract to pay you a fixed 8% on the capital in your account every week, for 50 weeks a year.
Treasurian will pay installments into that account or any other account you nominate every two weeks.
If the grants you receive stay in that account it won’t just be 400% IRR per year, you will be experiencing the miracle of compounding interest.
Compounding with the Developer Swing Loan Solution
So now what you thought was a desperate situation has changed completely. It has transformed your development business, because now with that same loan capital you can afford to build an additional 3 hotels, without borrowing any more money.
You no longer have to worry about retiring the loan because the grants you receive every two weeks are sufficient to retire the loan without having to seek out a long term loan or bring in equity partners.
This simple little activity of sending in a tear sheet every week has completely transformed your business.
When the permits do come through for that project, whenever that may be, you’ve got it covered.
Your headaches about never having enough money to pay your bills have gone away because the funds in you operating account can be spent as you wish, when you wish. Treasurian is not involved in you account decisions. All they require is an account balance sent weekly (which they can automate via treasury management software).
You have solved your developer swing loan problem for good.
Visit Treasurian.com to download a free report as to how this is all possible. TR