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Development Finance: Stretched Senior 70% LTGDV for 8 Houses
Positive Commercial Finance specialises in stretched senior development finance for ambitious developers taking their next big step. This case study shows how we helped a relatively inexperienced developer move from a single-house project to an 8-house scheme.
The Challenge
After successfully completing his first residential project (1 house), the client identified an opportunity to develop 8 houses on a site with planning consent already in place. Key hurdles included:
- Limited cash from the first scheme (only covering a small part of the new land purchase)
- The developer wanted to self-project manage (no main contractor on a fixed-price contract)
- Requirement for high gearing at 70% Loan to Gross Development Value (LTGDV)
Most lenders are reluctant to back developers making such a big jump in scale without substantial cash equity.
Our Solution
We found a specialist lender willing to support the step-up. They recognised the developer’s skills and accepted the self-managed approach. The facility was structured as a Stretched Senior development finance package, providing the high LTV needed to make the project viable.
Deal Structure
- Loan to Gross Development Value (LTGDV): 70%
- Interest Rate: 1.2% per month (interest retained)
- Arrangement Fee: 3%
- Exit Fee: 1.2% (based on facility amount)
- Term: 12 months
The Outcome
The client successfully secured the funding to proceed with the 8-house scheme without needing a main contractor or large cash injection. This allowed him to take a confident next step in his development career.
Contact
John Waddicker On 07974 703375 or message here
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