With a history steeped in Property expertise, Grindrod Bank has a strategic focus on commercial and industrial property finance.
Each potential transaction is subject to extensive analysis, and is approved on its individual merits. During this process, emphasis is placed on the following criteria:
- Location of the property
- Property type
- The market value of the property and its condition
- An acceptable loan-to-value (LTV) proportion – normally 70%
- The financial strength of the owner and the property’s tenants
The minimum value of loans for specialised property financing purposes is R5 million.
Length of the lease should equal the length of the loan, with capital and interest being amortised over the period of the loan.
MEZZANINE FUNDING
As an additional property finance offering, the bank also has the skills and ability to provide mezzanine funding, on a selected basis, for deals between R3 million and R20 million.
This facility is a hybrid of debt and equity financing, which is typically used to bridge the gap between the borrower’s own equity and the principal loan.
In analysing each transaction the following are considered:
- The financial strength of the Borrower and their ability to provide additional security if required
- The financial strength of the tenant, whose lease must be able to support the mezzanine loan with sufficient interest repayments
- A defined exit strategy within a predetermined time period, usually no longer than 36 months
Equity, profit share and/or economic participation are determined on a deal-by-deal basis.
With operating divisions in Durban, Johannesburg and Cape Town, Grindrod Bank’s lending division is able to consider any property location.
Applications are processed speedily, and interest rates and fees are negotiated on a deal-by-deal basis.
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