100% funded Development due to Deferred element

Deal Structure

115% of required amount (Purchase Price minus Deferred element) on Day 1 (as a NET figure),

Then 100% of Build Costs (in tranches, in arrears).

Subject to a maximum of 70% LTV/ 70% LTGDV.

Interest Rate 0.99% pcm, rolled up.

2% Arrangement Fee, added to the loan.

No Additional Broker Fees

1% Exit Fee

£1.2m gross loan amount

18 months term

Deal Summary

Our experienced Developer client was prolific in his area and had a great track record of converting commercial buildings into residential units, typically creating between 10 and 20 apartments. He was approached by an agent who was mandated to sell a vacant commercial property. The vendor was happy to “do a deal” and it was agreed that part of the purchase price was Deferred i.e. delayed for up to 24 months, and would only become payable from sales proceeds once the incoming Development Finance lender had been fully redeemed.

We were asked to source a lender who was happy to consider scenario’s where the Developer wasn’t putting in a Deposit, as the vendor was deferring part of the purchase price. Given our clients track record of successfully delivering similar sized projects in the immediate location, we quickly identified the best match from the Lender marketplace and presented terms to our client which worked well. Not only did the Lender provide the vendors required sum on Day 1, but they were also able to provide a small amount of cash-flow (also on Day 1) to assist with professional fees and materials. Thereafter, 100% of the Build Costs were made available in tranches, in arrears.

Given it is essentially 100% funding, the interest rate was reasonable at 0.99% pcm (charged against the drawn sum, with no non-utilisation fees) and there was no profit share required, with the lender applying standard Arrangement & Exit Fees for a Development Finance facility.

All told, a great result for a very happy Developer client.

Contact John Waddicker

07974 703375

[email protected]