Development Finance facility for 6 new-build units

Deal Structure

68% Loan To Gross Development Value

Interest Rate 0.95% per month, with interest retained

2% Arrangement Fee

1.5% exit fee (based on the facility amount)

18 months term.

Deal Summary

Our experienced developer client agreed a “Joint Venture” with a land owner on the South coast, where the land owner was happy to take part of his payment as a deferred payment, from sales at the end of the development. In essence, the developer needed a 100% funding package, to cover the initial land “deposit” plus then 100% of the build costs.

We arranged a gross Development Finance facility of just under £1.8m, at 68% Loan to GDV, which satisfied the developers funding requirements.

We are partnered with lenders who can get comfortable with the developer putting no cash in towards the land purchase, and our chosen funder was more than happy with the proposed structure.

At the eleventh hour, the vendor declared that the land was VAT elected, and so we had to arrange a short-term loan to cover the VAT on the purchase price. We approached a specialist VAT lender, and co-ordinated all parties so the deal was promptly concluded.