Developer Exit Bridge with works still to be finished

Deal Structure

£925k loan amount.

80% LTV gross on Day 1.

A further £45,000 made available in arrears.

2% Arrangement Fee

Interest at 0.89% pcm

No Exit Fees

No 3^rd party QS monitoring required.

Deal Summary

Our developer/ investor client was “almost finished” converting an ex-office premises to 4 apartments in the West Midlands but had faced some difficulties and cost over-runs with the scheme. Whilst the incumbent Development Finance lender had been patient, their own funding line could not facilitate a further extension, hence we were tasked with finding a new lender to step in to fund the part-complete development.

Given the cost over-run and due to the current loan having already been extended, the Day 1 LTV requirement was higher than most lenders would accommodate, so we needed a more specialist lender to come on board.

Due to the cost of works to complete being under 10% of the total budget, the chosen lender was happy to work off the GDV figure as the “current” site value, and with the remaining costs to complete being retained and made available (if required) when the works had been fully completed. An 80% LTV position made the proposed loan numbers workable.

The exit strategy was via a combination of sales & refinance, and the incoming lender was happy for the developer to put tenants into the property if any came forward whilst the other units were marketed for sale. The developer also owned some other property assets to “fall back” on in the event that buyer appetite was limited.

The developer is now expecting to have works finished in 4 weeks and will begin marketing the finished property imminently.

Contact John Waddicker

07974 703375

[email protected]