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.
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!