Finish and Exit Bridging Loan
What was the situation?
An existing client of ours suffered multiple delays on their development project; to convert an office building to eight residential apartments, which included an extension on the roof. The delays caused were as a result of their contractor’s firm collapsing part way through the project construction.
What was the issue?
The client had come to the end of their term with their existing lender and had run out of funds to complete the project.
What was the process?
We had to source a lender who was able to value the site based on how close we were to achieving the gross development value (GDV). Many lenders would request that when a valuation is carried out, it is to be done on the basis of what would the property sell for if it went on the market in its current condition. As the property was part built and none of the units were finished, it would mean it could only be sold to a developer and typically they would require a 25% margin. Once this is built in alongside the acquisition costs, including stamp duty and legals, it would reduce the residual valuation considerably and therefore we would not be able to get the loan that was required.
What was the solution?
We sourced a lender who was able to support a valuation figure that was only marginally lower than what the remaining costs of the project were, less the GDV. With this high valuation, we could refinance the existing development lender, increase the leverage and provide the much needed additional funding that was required to complete the development works and provide sufficient time for the developer to sell the units.
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As a returning customer, I would like to express my sincere thanks to the team for their outstanding support during the completion of my property purchase. In particular, Catherine and Darren have been incredibly helpful throughout the process. Their communication, professionalism, and customer service have been absolutely excellent, making the entire experience smooth and reassuring. Many thanks again for all your hard work.
My fiancée and I were recommended to LDN Finance when we started our mortgage journey, and the service we have received, and continue to receive, has been outstanding throughout. Phil Levesley initially looked after us and made what can be a very daunting process feel straightforward and easy to understand. He took the time to explain everything clearly, never rushed us, and was always happy to answer any questions we had. Nothing ever felt like too much trouble. As part of the process, we also wanted to explore a number of protection policies, and Phil introduced us to his colleague,
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