Finance for Joint Ventures
BiG Property Finance will consider putting up to 95% of costs for residential development or refurbishment and work in joint venture with a development partner over 24 month's. What is a joint venture? A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing property, residential or refurbishment development projects. How does this work? An appraisal is agreed with a fixed profit share to BiG. The property is bought/transferred into an SPV Company that is 100% owned by BiG. Simultaneous to the above, BiG and the Joint Venture Partner (JVP) enter into a Contractual Development Agreement which protects each party's rights. JVP has a facility over an agreed period to develop the property and sell or refinance the property. Interest of 8% per annum is applied to the facility. Upon repayment of the debt, interest and agreed profit share the shares in the SPV are transferred to the JVP. What are the benefits of a joint venture? 1. Access to new markets and distribution networks. 2. Increased capacity. 3. Sharing of risks and costs with a partner. 4. Access to greater resources, such as specialised staff, technology and finance.