The borrower had successfully bid for a property purchase, and required funding within 28 days to complete the purchase.
The borrower is a property entrepreneur that regularly purchases properties in London, with a view to refurbishing them and selling them on. The borrower regularly purchases properties at auction or from receivers (through distressed or off-market sales).
The loan was originated by LendInvest, which is the online origination platform that Montello funds many of its loans.
The borrower in this instance was a regular LendInvest borrower, and has a strong working relationship with LendInvest. This allows LendInvest to work with the borrower, and the transaction can be vetted and provide indicative funding terms, before the borrower has exchanged contracts to purchase a particular property.
The borrower in this instance had purchased the flat for £1.2 million, and required a gross loan of £900,000; providing a gross Loan To Valuation of 75%.
In this instance, the borrower had put down a deposit of £120,000 for the purchase. If the transaction was not completed within 28 days, then the borrower faced the risk of losing his deposit.
The borrower had £300,000 to contribute to the purchase price (plus stamp duty and other transaction costs), and the additional funds to renovate the property. The works to the property were to cost circa £200,000.
LendInvest originated and Montello funded the borrower to complete the purchase. The works were done to the property, and it was subsequently sold at a substantial profit to the borrower.