In this guide
Why the exit comes first
Private credit is short-term money. On a 3 to 60 month loan the lender is repaid by an event, not by monthly income: a sale, a refinance, a settlement. If that event doesn't happen on time, the loan is in default however good the security looks.
That is why we read the exit before we read the valuation. A good exit answers three questions: how the loan is repaid, by when, and what evidence says it will happen. Most declined scenarios answer the first question and skip the other two.
The exits we accept
Every exit below can work. What separates a fast yes from a no is the evidence that comes with it.
| Exit | How the loan is repaid | Evidence we want to see |
|---|---|---|
| Sale of completed stock | Units or lots sell and settlements repay the loan | Agent appraisal, the project's sales rate since completion, exchanged contracts, a price list against recent comparable sales |
| Sale of the asset | The property is sold on the open market | Independent valuation, agent appraisal, a campaign timeline, days on market for similar assets |
| Refinance to a bank | A bank or non-bank takes out the loan once a condition is met | An indicative letter or approval, the condition you are waiting on and its date, serviceability on the new lender's terms |
| Construction finance | The land loan is refinanced into construction funding once the DA is in place | DA status and timeline, a QS cost plan and the builder's contract. Pre-sales aren't required, but evidence of pre-sales or pre-leases counts in your favour |
| Refinance with Blue Streak Capital | On completed product, we refinance internally into an interest-only facility that carries the stock while it sells or leases, at rates that are competitive, often better than the market | Occupancy certificate or practical completion, an on-completion valuation, and a sell-down or leasing plan |
| Lease-up, then refinance | New income lifts the asset until a bank will lend on it | Signed leases or heads of agreement, leasing agent advice, target income against bank criteria |
Evidence that carries weight
- Send documents, not descriptions. One exchanged contract carries more weight than a note about strong buyer interest.
- Use someone independent. An agent's appraisal, a valuer's report or a lender's letter counts for more than the borrower's own estimate.
- Pre-sales and pre-leases help. We don't require them, but exchanged contracts or signed leases make an exit easier to believe, and we favour them.
- Give a date. We can test "bank approval once the lease completes in March". We can't test "refinance when the market improves".
Five mistakes behind most declines
- The exit takes longer than the term. If the sell-down needs 14 months, a 12-month loan is set up to default. Ask for the term the exit needs, plus a buffer. We can extend if a borrower needs it, but planning the term properly up front means you shouldn't have to ask.
- One buyer, one lender, one event. An exit that depends on a single party is fragile. Show the second path.
- Valuation uplift as the plan. "It will be worth more after DA" is a hope until the DA is approved and a valuer agrees.
- No room for interest. Capitalised or prepaid interest has to fit under the line at the end of the term, not only at settlement.
- No track record. Experience is evidence that the exit will actually be executed. Show the borrower's past projects.
If the exit takes longer than the term, the loan is a default waiting to happen.
How to write it in the scenario
Three sentences are enough. Here is an example for a residual stock loan:
- How: repaid from settlement of the remaining nine townhouses.
- When: sell-down over ten months, at the project's sales rate since completion.
- Evidence: agent appraisal, sales history and three exchanged contracts attached.
The example is illustrative. Your figures will differ.
Send the deal
Enter the deal type, value, loan and term, add your three sentences, and send it. You'll get a first answer within 24 hours, and indicative terms within 2 days.
General information only. It isn't financial or legal advice and doesn't take your circumstances into account.