First National delivers interim financing within two weeks to help client meet vendor’s timeline and protect significant deposit amount.
Key idea: ingenuity, speed, trust, transparency
With a very aggressive timeframe and a significant deposit amount on the line, First National delivered interim financing within two weeks, while simultaneously expediting term financing to protect against rate variances.
What was the client trying to achieve?
A long-standing client with national presence wanted to make a portfolio purchase of six buildings. Right from the outset, speed was paramount. The client’s vendor had a firm closing date. No variations. No extensions. The whole deal hinged on that very aggressive timeframe.
Adding to the urgency of the timeline, the client had put down a significant deposit. The size of the sum created a scenario where walking away and considering the deposit a sunk cost was not an option. The client was in with two feet, so the only option was to close.
“It was up to us to prove our performance with this deal,” says Darryl Bellwood, Assistant VP, Commercial Financing. “We knew we could deliver the deal, but we had to be swift, efficient and transparent. By doing so, it was an opportunity to instill that next level of trust, credibility and confidence in the relationship.”
Putting the deal together
The interim was the first stage of financing, which First National closed to meet the aggressive timeline for securing the property. While working on the interim financing, Bellwood and his team were also busy putting together the term financing. They wanted to close on stage two as quickly as possible to minimize any impact from rate variances. Typically, a term deal like this one would take approximately 120 days to close. Bellwood cut that time in half, closing on the term financing in 60 days.
“Our client is national, with 65 per cent of its business in Ontario, and the rest spread out across the country,” says Bellwood. “To expedite the deal, we leveraged our network to engage a lawyer that could work with the client’s lawyers across the country. It was important that they had the information necessary to enable the quick closing on the interim piece.”
The client received the interim financing in two weeks, meeting the aggressive timeline and safeguarding its deposit. In addition, with the expedited 60-day close on the term financing, the client secured a cost-efficient rate.
Why First National?
For Bellwood, there aren’t problems, only solutions. In fact, he relishes the more challenging deals because they create opportunities to build a brand, build relationships and set precedents.
With this deal, the client would be have been hard pressed to find another lender that could close interim financing within two weeks. It’s not standard or normal industry practice. It takes a lot of hard work and ingenuity.
“We removed the time consuming obstacles for phase one and focused on doing whatever was required for phase two when we had the luxury of a bit more time,” says Bellwood. “For us, things get done according to the deal, not according to some rigid internal structure or bureaucratic limitations. We avoid all of that at First National.”
As a result of the pressure of the timeline in phase one and the sensitivity around rate for phase two, openness and transparency were critical. Bellwood kept the client apprised of each step along the way and was accountable for what was promised and delivered. It made the experience seamless and stress free.
“I always believe in empowering my clients with options,” says Bellwood. “I know that ingenuity is part of our value system at First National, so we never have to say no, unless it’s an unfavourable deal for the client. That’s what comes with being malleable. We can present opportunities, empower our clients to make smart decisions and then deliver quickly and efficiently.”