Development Case Study: Facility amendment after developer hit with material and labour shortages
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Location: East London
Original terms:
Total loan: £1.8m
LTGDV: 65%
Amendment:
£95,000 increase to construction loan to 70% LTGDV
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Read more: Flexibility the key to managing material delays and price increases in development
One of our longstanding client’s had seen cost increases throughout the development as a result of the industry wide material and labour shortages.
Hit with additional costs due to materials and labour, they had managed the costs from their personal cash flow but reached a point where they required extra funding to complete the units or risk seeing the development come to a stall.
They were approaching the end of the year, and felt they could complete all of the units early in the New Year with the extra cash injection.
Of the five units that made up the project, four had been reserved in line with gross development value with extra viewings booked on the fifth.
Given the demand for the houses and the anticipation of reaching practical completion sooner, we were happy to support this facility amendment to help the project reach completion as the clear exit and repayment of the original development facility was expected.
James Russell, Relationship Director, said about the deal:
“This is a common issue we have seen across our development portfolio. We are always open and willing to work with our developers to get the best result for them and LendInvest. This type of service and support is why this developer has borrowed from LendInvest multiple times and will continue to do so.”
Contact the Development team to discuss your next development project.