£2.9 million development funding for experienced property developer

Need development finance? We have the banking contacts to provide a tailored solution where other lenders may not be able to help. To discuss this or any other large or complex mortgage case, please contact us on 020 7519 4984 or email us.

Case profile

Our client, an experienced property developer, approached us to arrange development funding to build four new residential units. A ‘Joint venture’ collaboration with a previous funding partner had collapsed, and he required a new package to allow him to complete the project.

The case presented a number of initial challenges. First and foremost, the total funding package required was larger than the standard Loan to Gross Development Value parameters. Although the client had equity in the form of a previous development, it had not yet been sold, and the client was, therefore, unable to make a cash contribution to the new development at the time.

In addition, the size and location of the properties the client was planning to build created a challenge when sourcing a lender.

Solution

Despite these challenges, we were able to find a funding solution for the client that enabled them to proceed with the development of the four residential units. We leveraged our extensive experience in arranging large and complex development finance and our strong relationships with a range of private banks and specialist lenders to assist.

After taking all aspects of the client’s circumstances into account, we ascertained that before arranging funding, the client would have to release the equity from a previous development. In addition, he would have to secure a price reduction on the consented site.

Over the coming month, we worked closely with both the client and lender. We demonstrated to the lender that this was a profitable project by presenting a strong case. As a result, they were willing to wait for the client to release the equity from their previous project to inject into the new development.

In addition, following the valuation survey, terms were offered against a slightly reduced end value, securing the price reduction the client needed. These were the two things the client required to achieve the funding.

However, there was still a gap in the finance required to meet the initial purchase price. Again, we quickly put a mezzanine funding line in place for the client, to cover the shortfall.

After much patience from both our client and the lender, we were able to put all the funding in place to enable our client to proceed with the development on competitive terms.

Deal Highlights

Loan amount:£2.4 m - Senior development funding
£500,000 - Mezzanine finance
Rate:7.5% - Senior development funding
Term:15 months
Type:Interest Only - repayment on sale
Loan purpose:Development funding
Lender’s arrangement fee:1.5% of the loan amount
Exit fee:1.5% of the loan amount

Notes

This case study is for information and illustration purposes only. It is not an offer, or suggestion of an offer. Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.

Please note that this specific deal may not be available to – or suitable for – all customers, dependent on their individual circumstances. The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it. This document may not contain all the information needed for customers to make a decision and they should seek advice.

Your home or property may be repossessed if you do not keep up the repayments on your mortgage.

Return to Our Case Studies

Our insights


We are the UK’s leading specialist in delivering innovative and bespoke financing solutions to global clients.

Reviews


Specialists in creating innovative and bespoke funding solutions.

Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home.  

largemortgageloans.com is a trading name of Largemortgageloans.com Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London, E14 9QD authorised and regulated by the Financial Conduct Authority (FCA). Our FCA registration number is 302228 and can be viewed by visiting the FCA website: www.fca.org.uk.  The FCA does not regulate tax advice or some aspects of commercial, buy to let, overseas mortgages, bridging finance, finance and asset lending.  

Largemortgageloans.com Limited is registered with the Guernsey Financial Services Commission, reference number: 2269418, as a Non-Regulated Financial Services Business.  

Largemortgageloans.com Ltd Registered in England and Wales No: 5070990 Registered Address: As above. The guidance and advice contained within the website are subject to the UK regulatory regime and is primarily targeted at UK customers. Calls may be recorded for training and monitoring.