Loan amount: £4 million
A developer approached after they finished practical completion on this project for a Development Exit loan to support them while they sold the completed units.
The 11-property new build scheme, a mix of semi-detached and terraced house, had experienced delays due to the pandemic and supply issues. This meant they were approaching the end of term with the development lender before they’d had time to sell the units.
As a result they wanted to refinance onto lower-cost Development Exit funding while they marketed and sold the units; and used additional capital to acquire another site.
This developer had experience of constructing and selling similar scale projects in the past, but this was the first interaction for the broker and developer with the Structured Property Finance team.
We were able to fully meet their needs of securing the completed units while they were sold, structuring the loan to allow for capital to be released above the repayment of the existing development loan, and agreed to future sales retentions.
Tom Madden, Director of the Structured Property Finance team, said about the deal: “The key to supporting the developer on this scheme was to be able to offer to repay the existing development loan which was coming to the end of the term and to provide a significant capital raise of over £1m for them to reinvest into a new site acquisition.
“We pushed the LTV right up to 75% and at market-leading pricing that won the deal with both a new broker – who we are now actively working with – and a new developer that we are in discussions with to partner on future projects.
“With offers accepted and sales progressing on a number of units we are also in a position to allow retentions on sales of the individual units for business cashflow to aid the borrower further.”