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Development Finance facility at 70% Loan to GDV for the construction of 8 houses in Leicester

Deal Structure

70% Loan To Gross Development Value

Interest Rate 1.2% per month, with interest retained

3% Arrangement Fee

1.2% exit fee (based on the facility amount)

12 months term.

Deal Summary

A rather inexperienced developer wanted to take a bold step after successfully carrying out a first project of 1 residential property. An opportunity presented itself with a site which had planning consent for 8 houses. Given the developer wanted to project manage and therefore NOT employ a main contractor on a fixed price basis, we needed to find a funder who recognised that the borrower had the necessary skills to take a large step up.

In addition, high gearing was necessary, at 70% LTGDV, given the profits from the first scheme only covered a slim percentage of the land purchase price on this next scheme.

Most development finance lenders will not back a developer jumping up to a significantly larger second scheme unless they had the necessary cash required to put into the project. We found a lender who was happy to provide the client with the Development Finance he required!

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 NACBF and FIBA. ICO registration reference Z1196910.