I like major banks, but what other funding solutions can you bring to the table for us?
There is a whole other world of finance and debt package solutions. Nexus Capital Partners has direct access to mortgage trusts and private lenders for property-related transactions and large alternative asset managers for more bespoke capital solutions and corporate debt structuring for commercial business clients. We have relationships and active dealings with around 20 of these types of finance providers as well as the major banks.
What rates and fees do I pay?
The rate typically will be determined by the quality of the transaction and the fundamentals i.e. quality of the asset, quality of cash flows, proven or speculative business model, equity in the deal (whether that’s a CRE deal or a business acquisition), and most importantly, whether the transaction is “bankable” with a major bank i.e. cheaper rate or a non-bank arrangement. Quite often, our involvement in a transaction and our knowledge of the pricing metrics and levers banks use (We worked in this space for +10 years) means you can be assured your pricing will be on the lower end of the scale, and the competitive tension we introduce to the process can quite often see a client benefit considerably. Once we have scoped the transaction and had a meeting with stakeholders, we can confidently give a range of where we would expect an all-up interest rate to be, and on a market tender process, we will only undertake this process if we are confident of a financial benefit to the client via a reduced all up interest rate and/or overall better terms and conditions and facility structure.
I don’t want to borrow new monies, does your business model offer advisory services/Market Tender of current loan facilities?
Tendering existing facilities, repositioning facilities to achieve more leverage, covenant reviews, and debt advisory services are a large part of our business, and our mandates and engagement letters are tailored for such services. Our previous banking experience from Senior positions within the banks ensures our clients benefit from insightful capital solutions that are aligned with the current commercial objective. Our market tenders, especially for mid-market size clients wanting to look at debt capacity and revise facilities for growth, and property clients with assets that might have a stronger WALE or a new tenant which now brings a stronger Interest Coverage Ratio greatly benefit from our discrete tendering process, which is prepared with a detailed Information Memorandum and financial models which is aimed at achieving absolute outstanding results.
I already have my own bank manager, although I have had 5 in the last 2 years, isn’t it best I just keep dealing with the same bank myself?
We value relationships, our business is built on relationships. We have clients we have worked with for 10 years in a variety of different capacities. We encourage any client they desire to work with their “main bank”. However, there is an entire world of other funding solutions outside what your bank relationship manager can provide, and they can only really provide a solution from their one toolbox of products and cannot be a truly independent and unbiased advisor to you when employed by a bank or a financial institution.
We are banking, commercial/corporate finance, and commercial property experts. We consider ourselves an outsourced finance function for our clients, and experts at everything banking and finance; so, with that in mind if you are a business owner with a business turning over +$25m or a property developer with multiple projects on the go and a variety of different assets, wouldn’t you want to engage an expert firm in finance to take control over the debt advice, sourcing of new facilities and facilitate your arrangements?
By tapping into our resources, knowledge, relationships, and experience, we can achieve an improved outcome that adds value across a variety of different factors and exceeds client expectations, compared to a situation whereby you go direct to your banker/bank and receive an outcome that perhaps the bank wants you to have.
What do the banks pay Nexus Capital Partners?
We are accredited with all the major banks, smaller banks, and challenger banks to receive introduction fees and trailing commissions. The type of engagement we have with the client ultimately determines if we are to be paid by the lender, client direct, or a combination of both. All fees are disclosed and there are times the bank fee to introduce the transaction is sufficient and the lender will pay us directly. Every transaction and circumstances are different, and the fee model is disclosed within our engagement letter. Often, particularly on a tendering of facilities and if a refinance is deemed the best outcome, our involvement in the transaction will see the client yield a significant cost saving via a lower interest rate, and this is inclusive of any trail commissions, and these are not “loaded” up into the client interest rate. If we are engaged under a success fee arrangement, we may use any upfront bank introduction fees to offset the agreed total success fees. This is an advantage we have over debt advisory firms/ big 4 accounting firms etc as we have the expertise and experience to execute such engagements, but we have accreditations with banks to receive commissions which the client can benefit from.
You have done such a great job with my business and property projects, I have a friend who wants a home-loan, can you assist him/her?
No, we are a boutique commercial and corporate finance firm providing debt advisory services, new finance raising, and tendering of banking arrangements typically in the mid-market/SME space for businesses across an array of industries, property investors, and developers. Whilst some of our competitors offer this service (amongst one hundred other things and have their fingers in numerous pies) we only provide advice, and solutions and facilitate transactions in the commercial/corporate space.
We do, however, have a referral partnership with a specialized home-loan broker firm whom we trust and deal with on a partnership basis for our client’s home loan requirements. This makes sense, as this does save our client time having to “tell the story” to a new mortgage broker or bank, and as we hold all the financials, cash flow and flow of funds, and asset summaries for our clients, this is a seamless process for our clients.
What is the core business model of Nexus Capital Partners and What Do You Do?
Our business is a specialist boutique commercial finance firm, and as per our logo we Source New Finance, Advise on New and Existing Finance and Facilitate the entire finance process. We provide debt advisory services, as well as the traditional commercial broker solutions to predominantly property developers and construction of mixed-use assets, retail, industrial, and childcare to name a few, and then non-property SME/mid-market clients for working capital solutions, acquisition funding, growth funding, MBOs, and debt restructuring and consolidation. Our business has two very distinct specializations;
- Business and corporate finance-related engagements and
- Property construction, development funding, and commercial property investment
Most of what we do is arranging new and repositioning existing facilities with banks and non-bank financiers usually with minimum debt requirements of $3.00m – $100.00m and business’s with turnover or forecasted turnover of $15.00m – $150.00m – That is our typical client size.
We work with clients who typically are seeking to partner with someone who ultimately can source new funding solutions to accommodate growth, acquisitions, and developments, and the costs involved are recovered by superior terms and rates, freeing up time as we deal with market and provide independent, unbiased interests aligned with the client.
I own a small business and I want to develop a 100 unit skyrise on the beach, I have no experience, DA or equity, it seems you can help me?
As we are boutique and see ourselves as outsourcing a clients finance function and process, the clients we work with (Both CRE investors/developers and the business/corporate clients) are often either medium /large size professional developers with numerous projects “on the go” and business’s with requirements that require our expertise in acquisition finance, market tendering of facilities, debt restructuring and debt capacity analysis for both mature and high growth large SME and mid-market size clients.
We, unfortunately, do not have a magic wand to provide capital for a such scenario and there might be a funding solution for such, but we won’t typically be involved in a one-off speculative project with an inexperienced sponsor.
How can Nexus Capital Partners pitch my transaction in a better way than I can, I know more about my assets and business than anyone else?
Our mix of commercial, financial & banking knowledge across a variety of different businesses, sectors, and asset classes ensures that our clients benefit from an insightful process and capital solutions that are aligned with their commercial objectives. We invest the time to understand what you do and how you do it, your customer and supplier issues, and your competitive strengths. We maintain open minds and leverage experienced networks to bring quality results to our clients. We of course are a serviced based business, but we don’t just offer services, we provide solutions.
It’s not just about “pitching” a transaction and whether we do it better, but we know we put together a quality information pack and we know what financiers do and don’t want to see – we spent collectively 20 years in banking and property divisions. It is our knowledge of financier appetites at any given time which enables us to get the best possible outcomes, as we live in the debt and capital markets every single day – it’s what we do and what we are good at.
And more importantly, the world of finance has changed rapidly over the last 5-7 years. You might be pitching something to someone at the bank, who doesn’t have a clue what you need, want, or trying to achieve. For clients that are not active borrowers, haven’t needed to borrow, or are new altogether in the world of commercial and corporate finance, there is a whole world of funding options outside the 4 major banks – this is our value add to introduce potentially other funding solutions as required, via our network within the non-bank sector.