£3.19m Development Finance facility at 6.75% pa

Deal Structure

£3.19m facility (gross, including interest & Arrangement Fee)

68% LTGDV & 82% Loan to Cost

1.25% Arrangement Fee

Interest Rate 6.75% per annum

1% Exit Fee (based on the facility amount)

18 months term

Deal Summary

Our property developer client already had an existing relationship with a bank whom he had used to fund a number of developments over the last 10 years, however they had recently imposed restrictions which meant he had reached his exposure-per-client limit with that bank, given he had 2 sites currently under development with them.

Another opportunity site presented itself which was a perfect fit for the developer in terms of unit numbers and location, and therefore he did not want it to pass him by. He therefore engaged with us to open up new avenues of Development Finance, to facilitate the purchase and build on this next project of 12 units near Oxford.

His track record was impressive, as was his local knowledge, and so the project proved to be an interesting proposition for a number of funders. Detailed planning permission had been granted and it was a cleared, level site with no contamination issues.

The developer was most comfortable with an option which kept his cash contribution to what he thought was a “very reasonable” level and the lender had his preferred Monitoring Surveyor on their panel. Further, the new funder provided a higher Loan to GDV than the developer was accustomed to with his current funder, which means he expects to be able to accelerate growth at a faster rate than previously anticipated.