Land loan – 50% LTV
Development loan – 65% of GDV
Interest rate – 1.25% per month
Arrangement fee – 2%
Exit fee – 1%
12 months term
Our client is a ‘first time’ developer who owned a site, unencumbered, with planning consent for 5 houses.
The client had an urgent cashflow need in another of their businesses and urgently wanted to borrow some money against the land value. The plan was then to obtain a planning uplift for larger properties and develop out.
The risk issues for the lender were:
We therefore needed a Property Development Finance lender that could be extremely flexible in their approach to the deal.
Such a lender was sourced and a commercial view was taken on the ‘risk’ issues mentioned above, allowing a fast drawdown against the land value and a development facility went in place once the ground investigation reports were available and the planning uplift was obtained.