65% LTGDV Development Finance at 6.5% per annum

Deal Structure

£3.19m facility (gross, including interest & Arrangement Fee)

65% LTGDV & 80% Loan to Cost

2% Arrangement Fee

Interest Rate 6.5% per annum

1% Exit Fee (based on the facility amount)

18 months term

Deal Summary

Our experienced developer client had agreed to purchase the site in Cheshire which had planning consent for 15 houses, which included a mixture of 3, 4 and 5 bedroomed detached and semi-detached units to be built in a gated community.

The purchase was agreed some time ago, but the client agreed with the vendor that there would be “no rush” in getting the land purchase complete, given the current climate. Our client acts as both Developer and Contractor, and wanted to finish his current scheme before moving his team over to the new site, so timing was key.

Using some of the net sales proceeds from the sales on his current site, the developer covered part of the land acquisition price and was happy with a Development Finance facility at 65% Loan to GDV. Given his level of experience, we were able to access a finance line at 6.5% per annum, charged against the drawn sum.

The build programme is anticipated to be 12 months with marketing to be launched once a show-home is ready. Local agents all expect demand to be very strong, with sufficient sales to redeem the Development Finance facility in full, within the 18 months term.