Interim CFO at a developer: structuring the capital

When a property developer loses its commercial leadership while the financing of a live project still has to be closed, the resulting gap cannot be filled through a normal recruitment process. A mid-sized developer bridged this phase with an interim CFO – and used it not only to keep the business running, but to rebuild the project's entire financing architecture.

Starting position

The development was well advanced, but the financing had not been finally secured. At the same time the business had no commercial leadership – in a situation where shareholders, banks and project partners all expected reliable numbers and a dependable counterpart.

Compounding this, the existing figures were not good enough for bank conversations. Calculations existed, but there was no integrated model showing construction costs, sales proceeds, interest and amortisation consistently across the project phases. Without that foundation no capital can be raised – neither equity nor debt.

The brief

The mandate combined two tasks that cannot be separated in practice: running the business day to day while bringing the financing to a close.

• Full commercial responsibility on an interim basis, including liquidity management, cost control and regular reporting to shareholders and project partners
• Building an integrated, phase-based cash flow model
• Sensitivity and scenario analysis to quantify project risks
• Preparing an investment memorandum suitable for both banks and investors
• Designing the financing architecture across senior debt, mezzanine and equity
• Approaching co-investors and family offices, and running the bank process
• Supporting due diligence from the lender and investor perspective

How the interim CFO worked

Liquidity first, structure second

The first weeks were about capacity to act: making payment obligations, cash outflows and the runway of available liquidity transparent. Only on that basis can capital requirements be discussed credibly – and only then do conversations with capital providers become substantive.

The cash flow model as a shared language

The model built was phase-based, covering construction costs, sales proceeds, interest, amortisation and equity returns under a range of scenarios. Combined with sensitivities for construction cost inflation, sales delays and interest rate movements, it became the central instrument for every conversation with a capital provider.

The practical value of such a model lies less in computational precision than in negotiating capability: whoever can answer a bank's query within the hour, fully calculated, negotiates from a different position than someone who needs a week.

Design the capital structure from the risk

The target structure was not derived from a desired leverage ratio but from the project's risk profile: what share is bankable, where is mezzanine needed, how much equity has to stand so the structure holds even if the schedule slips? In parallel, co-investors were approached and the development finance was tendered in the banking market.

A memorandum that serves both audiences

Banks and equity providers read differently: one side examines security and debt service capacity, the other returns and exit. The investment memorandum was built to serve both perspectives – including market and location analysis, financing structure, risk presentation and exit scenarios.

Outcome

The project's financing structure was closed: the equity base was strengthened by bringing in a co-investor, and the development finance was secured through a bank facility. The cash flow model and investment memorandum remained the basis for every capital provider dialogue throughout – and contributed materially to building confidence with banks and investors.

What clients take from this

• Raising capital starts with data quality. No capital provider negotiates seriously on a project whose numbers they cannot follow.
• Equity and debt belong in one process. Running them sequentially costs time and weakens the negotiating position on both sides.
• Handover is part of the mandate. Model, reporting and documentation must work without the interim manager.

The profile an interim CFO needs here

This role demands a rare combination: development experience, confidence in financial modelling, and negotiating routine with both banks and equity providers. Add to that the ability to hold a credible line with shareholders in a tense environment.

For mandates like this, companies draw on experienced interim managers who have already carried comparable projects. The services page shows the fields we place in; for companies explains how clients proceed.

Related project stories: tendering development finance in the banking market and interim fund management in a service KVG.