Key Facts:
- Clients: British National and Resident
- Property Value: £6,550,000
- Loan Amount: £4,700,000 (£3,800,000 day one and £900,00 in further drawdowns)
- LTV: 58%
- Rate: 8% with 2% fee
In this case, we were approached by a client who was looking for development finance. The property in question was a large Scottish estate worth £6.55m with a listed manor house, holiday lodges, a lake, as well as a forest. The financing was required to develop a wedding venue on the site, convert outhouses and barn building and build a new function room.
Property development finance usually comes in the form of a short-term loan, which can be broken down into two parts. The first part is designed to help you with the purchase of a site, and in many cases, a lender will advance a percentage of a purchase price and leave you to fund the remaining amount (although lenders vary on this point).
The second part of the loan is to finance the build of the project. Generally speaking, a lender will often advance the total cost for this in stages, as and when they are completed. The lender will then certify the work and funds for each stage so you can pay suppliers. This means you will often need to have sufficient cash flow to fund the initial stages until you are reimbursed.
With experience in arranging everything from market-leading senior debt, competitive equity and specialist products for challenging plans, we can access many opportunities that simply aren’t available on the high street. With connections at every level of the market, we will be transparent and efficient in sourcing the best lender and terms for your circumstances, whether you are a first time developer or major firm.
In this case, the lender provided an initial loan to refinance the existing debt and allow the client to start works and would release more funds as the works progressed. Despite their wedding business being affected by the pandemic, we were able to source an option based on revenue from future bookings.
If you are looking for property development finance, get in touch today. Our advisers are on hand anytime to discuss feasibility, structure and timescales.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
