18 June 2024: Year of the Refurb

18 June 2024: Year of the Refurb

by Daniel Green, Green Finance Group

According to Chinese Zodiac, 2024 is the year of the Wood Dragon with a forecast for evolution, improvement, and abundance. In other words, it’s a good time for setting the foundation for long-term success.

From my perspective it’s looking more like the Year of the Refurb as I’ve assisted clients to secure funding for 2024 projects of varying sizes, including:

  • Renovation of wet and dry areas
  • Construction of additional seminar facilities
  • Procurement of new refrigeration and cooking facilities
  • Equipment upgrades for increased energy efficiencies
  • Expansion of gaming and entertainment precincts
  • Addition and/or refresh of outdoor dining precincts
  • Carpark expansion and grounds upgrades via extensive landscaping
  • Vacant land purchase

If renovation or refurb is in your forecast for 2024, the initial key to success is forward planning. If you are considering a renovation soon, here are three things you need to know about securing competitive finance for your project, within your required timeframe.

Funding Availability: The comparatively high interest rate environment coupled with an overhang of bank policy changes from 2023 is impacting big bank exposure to certain projects.

Knowing what is available across a range of lenders – both traditional banks and 2nd tier lenders – is more important than ever. Knowledge of all lender offerings, not just your current bank, will give you the best negotiating power.

Due Diligence: We are spending more time in the initial due diligence period, working through factors such as asset performance, risk management, management experience and capability, financial forecasting and construction risk where applicable.

Having priority access to key bank decision-makers and lender representatives with hospitality experience is a definite time-saving advantage in this marketplace. Make sure you’ve got experience on your side. Ask your broker or banker to provide recent comparable examples of funding scenarios they’ve facilitated to settlement.

Approval Timeframes: Current loan approvals are taking anywhere from three days to 21 days and largely depend on the size and complexity of the transaction.

For larger transactions or where a detailed valuation is required (most cases), this process can take up to two weeks depending on valuer availability and venue access.

The more thorough your business plan and the presentation of your business case, the more likely your loan approval will be fast-tracked at the lender end.

ABOUT THE AUTHOR: Daniel Green, founder and director of Green Finance Group, is a multi-award-winning commercial finance broker with over 30 years’ banking and finance industry experience. He is an industry leader in the sourcing of competitive funding for businesses in the hospitality, accommodation, and education sectors and currently leads a team of more than 20 specialist commercial, equipment and residential finance brokers based in five SEQ office locations.