Why JaeVee Is A Game Changer For Senior Debt Lenders
Last updated 11th July 2018 • Benjamin James • JaeVee
We take a look at the expectations of senior debt lenders and how we can alleviate their concerns.
Senior debt lenders have requested that property developers have some 'skin in the game' (cash) to ensure performance in delivering a proposed scheme.
Whilst it's logical, we're not so sure here at JaeVee that this ensures performance.
What happens if the developer goes bankrupt half way through?
What about if the developer doesn't perform or becomes unwell?
Yes, the senior debt lender via its first charge against the property title can repossess the property and sell it via auction.
If the project was 50% constructed, it's going to be worth less than what was initially paid for the land.
With this being the case, the lender's loan is likely to be exposed.
Whilst collateral warranties can be activated with the principal contractor, wouldn't it be more cost and time effective for the senior debt lender to have reassurances in place.
For someone to step in, take over the project and complete it?
Light bulb moment
This is where the idea of JaeVee was born.
We actively work with property developers throughout the UK in packaging together the most profitable and de-risked schemes available for senior debt lenders to lend against.
Saving them the time of having to find deals themselves and presenting them in such a way that it helps the retrospective underwriting team make a quick, informed decision.
JaeVee was founded by a group of property developers, contractors and surveyors.
This provides the expertise needed to take over a project (as a shareholder of the SPV) in order to complete the scheme.
This protects the senior debt lender’s first charge and ensures a successful exit is achieved.
Traditionally, senior debt lenders would look at the experience of the property developer on an individual basis. With the JaeVee projects, it's about the collective.
We're of the mindset that people tend to grow in experience the more they do.
It makes sense to foster and enable property developers to do bigger projects than they're doing now with a collective team of people whom have the relevant experience in delivering projects.
That's what JaeVee brings to the table.
Property developers are able to use our experience to build bigger projects than they're building now and senior debt lenders are able to take advantage of unearthed opportunities being found.
It's a complete win, win.
Peace of mind
We're assertively changing the mindsets of senior debt lenders on a daily basis as it's our mission to get Britain building.
We are enabling more people to build and deliver homes with the peace of mind that should there be an issue, JaeVee is on hand to take over and ensure deliverability.