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70% LTGDV Development Finance

Deal Structure

 

£4.23m facility (gross, including interest & Arrangement Fee)

70% LTGDV & 84% Loan to Cost

2% Arrangement Fee

Interest Rate 8.75% per annum

1% Exit Fee (based on the facility amount)

24 months term

 

Deal Summary

 

We were tasked to facilitate a Development Finance facility to enable a new client to buy a site in the North West which had planning consent for 27 houses including a mixture of detached, semi-detached and townhouses.

 

A fairly high leveraged facility was required, with a preference to avoid utilising third party mezzanine finance as the developer wanted only to have to deal with 1 lender, given a previous experience with a mezzanine funder involved “over-bearing” monitoring and duplication of professional fees.

 

Our new client was sufficiently experienced and had a strong enough profile to be able to access such funders, and as such we procured 2 quotes which were rather similar, at 70% LTGDV. The chosen lender won the business thanks to their pro-active approach and having the capacity to visit the site & meet the client within 48 hours of the terms being accepted, in principle. The facility then completed within 6 weeks of the site visit.

 

We facilitated a loan which provided 70% of the Gross Development Value figure (including interest & fees), which provided 84% of the total project costs. The interest rate reflected the leverage, and was agreed at 8.75% per annum, to be charged against the drawn sum. Given the number of units, a term length of 24 months was negotiated, to allow sufficient time for the sales process.

 

John Waddicker

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John Waddicker

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Positive Commercial Finance is a trading name of Business Financial Solutions Limited. Registered in England & Wales 06451075. Registered office address Warth Business Centre, Warth Road, Bury BL9 9TB. Authorised and regulated by the Financial Conduct Authority (716012). Full members of the NACFB and FIBA. ICO registration reference Z1196910.