Case Study · Singapore

Developer avoids losing $3M downpayment

26 March 2021

Developer avoids losing $3M downpayment
Developer saves $3m amid Covid-19 Crisis
Developer saves $3m amid Covid-19 Crisis

A company found themselves in a tough spot after they had purchased a commercial property and made a 30% downpayment. Due to the Covid-19 pandemic, the local bank that was supposed to lend 70% to the company reduced their loan-to-value ratio to 50%, leaving the company in need of a quick solution. With only 7 days to spare, the company was at risk of losing their $3.25 million downpayment.

In their hour of need, the company approached Rikvin Capital for help. Rikvin Capital understood the urgency of the situation and acted quickly, conducting due diligence and underwriting, and having legal agreements drafted. In a remarkable 72 hours, the loan was disbursed, helping the company complete the purchase of the property and avoiding the forfeiture of their hard-earned downpayment.

The borrower was eventually able to find a bank to refinance the mortgage and repay their loan with Rikvin Capital. Thanks to Rikvin Capital’s quick action, the company was able to overcome a difficult situation and secure the property they had their sights set on.

Problem

  • A company had purchased a commercial property and paid a 30% downpayment.
  • Due to Covid-19, the Local Bank that was supposed to lend 70% to the company had tightened their lending regulations and reduced their LTV to 50%.
  • The company had to quickly source for a temporary funding solution for the property within 7 days to avoid the forfeiture of their $3.25M downpayment.

Solution

  • The company approached Rikvin Capital to help them complete the purchase of the property.
  • To help the borrower, Rikvin capital quickly performed due diligence & underwriting, getting legal agreements drafted and disbursed the loan within 72 hours.
  • The borrower subsequently found a bank to refinance the mortgage and repaid their loan with Rikvin Capital.
  • Location: Kallang, Singapore
  • Market Value: S$10,850,000
  • Loan Amount: S$ 7,600,000
  • Loan-to-Value: 70%
  • Duration of Loan: 6 Months
  • Payment Schedule: Monthly Interest Payment
  • Asset Type: Commercial Building
  • Completion Time: 3 Days

Related post: A Bridge Over Troubled Waters: Empowering a Woman Entrepreneur through Timely Financing

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FAQ

My bank reduced its loan-to-value at the last minute. Can Rikvin Capital cover the gap?

Yes. The Kallang case here is exactly this scenario: a developer's bank cut the agreed 70% loan-to-value to 50% during Covid, putting a $3 million downpayment at risk. We funded a $7.6 million bridge in 72 hours, the deal completed, and the borrower later refinanced into a bank once conditions eased.

How fast can you fund to save a downpayment that is at risk of forfeiture?

Inside 72 hours is realistic if you come to us with at least a few days' notice. The Kallang developer had only 7 days to source replacement funding; we underwrote, drafted legal documents and disbursed inside the window. For very tight timelines, contact us as soon as the bank pulls back so we can run KYC and valuation in parallel.

Can I use a Rikvin Capital bridge until my bank loan comes through?

Yes. Bridge-to-bank is one of our most common setups. Once the bank conditions normalise or you find an alternative lender, you refinance and repay us. There are no early-repayment penalties, so you only pay interest for the time you actually need the bridge.

How much can I borrow against a Singapore commercial building?

Up to around 70% of valuation, as in the Kallang case ($7.6 million on a $10.85 million market value). Industrial and office assets in established locations support this level; less-liquid or specialist properties may attract a lower amount.