£2.9m Development Finance facility at 5.1% pa

Deal Structure

£2.9m facility

60% LTGDV

1.25% Arrangement Fee

Interest Rate 5.1% per annum

0.75% Exit Fee (based on the facility amount)

Deal Summary

We were approached by an experienced property developer who had previously arranged his own facilities and had a long-standing relationship with a bank. Having been made aware of what we could achieve via a mutual Developer contact, he called Positive Commercial Finance to put us to the test.

He owned a plot of land just outside the M25 which had recently been awarded planning consent for the demolition of an existing building and new-build of 10 detached houses in what was to be a very pleasant cul-de-sac adjacent to farmland.

The land was owned outright and the developer wanted to borrow 100% of the build costs and associated fees, which sat comfortably within a 60% Loan to GDV facility, including the lenders interest and Arrangement Fee provision.

One thing the developer made clear from the outset is that he wasn’t expecting to pay “upfront fees” for using a broker. Given that we always work on a “success only” basis, he was sufficiently comforted to learn that we didn’t expect to take anything upfront, nor if he didn’t go on to take a loan from a lender we introduced.

The developer was pleasantly surprised with our range of quotes and chose to work with a lender at a rate of 5.1% per annum (charged against the drawn sum), and with no non-utilisation fees.  He was also expecting an Exit Fee charged against the GDV, but our funder charged against the facility amount. We provided a significant cost-saving at a higher Loan to GDV than the developer was used to.