Construction Project Financing

Real estate development in Israel is a long-distance race: you identify an opportunity, locate land, prepare plans, manage tenders—but as soon as you reach the financing stage, many developers discover that this is the most sensitive and significant part of the project. This is exactly where professional construction project financing comes into play.

Adapting a financing solution to the project

Each project is a different story: there are projects with strong equity and strong presales, and there are projects where additional equity is needed or cash flow gaps must be bridged. As part of construction project financing, we examine the full picture—zoning plan, construction costs, sales forecasts, sales pace, planned cash flow, and risks—and build together with the developer the most suitable financing mix:

  • Classic bank project financing: Working with the lending bank, including the preparation of a professional zero report and the presentation of the project in a way that increases the chances of approval and improves the financing terms.

  • Mezzanine financing: supplementary financing used to complete the required equity, when the financing terms set by the bank do not allow the developer to bring in the full required capital.

  • Investor participation: participation by private or institutional investors in the project, while preserving the developer’s control and an appropriate balance between return and risk.

  • Complementary solutions: bridging finance, short-term loans, and dedicated credit frameworks until full project financing is available.

When a developer goes directly to a bank or financing provider, the developer may be at a negotiating disadvantage: the counterparty is a large, experienced financing provider with clear interests, while simultaneously managing planning, licensing, marketing, and construction. Most of the time, the developer will settle for one or two offers, will find it difficult to compare tracks, interest rates, covenants and conditions for releasing funds, and will sometimes choose a "reasonable" but not necessarily optimal financing solution.

Construction project financing by an objective advisory firm changes the rules of the game. We sit on the developer's side, speak the language of the financing providers, and conduct professional, assertive negotiations on the developer’s behalf on the terms of the credit: interest rates, fees, the loan-to-value (LTV) ratio for the land and construction, security mechanisms and Sale Law guarantees, repayment schedules and cash-flow flexibility throughout the life of the project.

Interested in checking what the right financing framework is for your project? Leave us details or call us at *8537 during business hours; we will be happy to assist.