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Case study

Stretched
senior debt

We were acting for an experienced developer looking at a well-located opportunity in the Croydon area. The client’s asset and liability position was strong and they had good experience of developments of this size and nature.

Funding requirement: ordinarily, the client would be able to source normal senior debt funding but, in this case, they had cash tied-up in other projects. Therefore, they needed to ‘gear up’ on this site as much as possible.

The scheme itself was the conversion of a vacant warehouse and office building, which was being developed under permitted development rights. The completed project would be for 20 apartments with a finished value or GDV (gross development value) of £8m.

Facility provided: we were able to structure a facility for the client that covered 85% of the total project costs including purchase, conversion costs and associated fees with a lender entry fee of 2%, a lender exit fee of 1% and an interest rate of 8% p.a. for an 18 month term.

Case study

Residential
investment

Our client had developed two, high-end houses that were to be retained as long-term investments. They were placed on the market and attracted two tenants that were ready to pay a deposit and sign tenancy agreements.

Funding requirement: the client wanted to maximise the leverage on the properties to allow for further purchases into their portfolio. However, each house was valued at £4,000,000 and they were both on the same legal title, so even with good ASTs the properties were not straightforward ones to place when the client was looking for high gearing.

Facility provided: while the ASTs were strong, the yield was still low given the nature of the properties, therefore a standard high street product was not an option. We found a solution that allowed 75% leverage by using a combination of a fixed rate for 5 years, giving the client peace of mind over the monthly repayments, and ‘top slicing’ from the client’s other income.

Case study

Bridge:
chain break

Our client had placed their home on the market, accepted an offer and began to look for their new home in their preferred school zone. They made an offer, which was accepted, but were then gazumped. They found another house, had their offer accepted, but then lost their buyer. In the meantime the original home had come back to market (the gazumpers had been unable to arrange finance) and the clients made a new lower offer with the condition that they would exchange in a maximum of 15 working days.

Funding Requirement: the only way this could be facilitated was to arrange a chain break bridge so the clients could exchange on their new purchase. The loan would then allow the clients time to sell their current house and repay the bridge.

Facility Provided: we were able to structure a facility at 65% of the value of the current home to repay the existing mortgage and the additional funds for the deposit. The same lender was then able to lend 70% of the value of the new purchase to allow for the completion with no minimum loan term of tie-ins so that repayment could take place as soon as the clients sold their existing residence.

Development Finance

Investment Finance

Short Term Finance

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