65% GDV secured for first-time developer on nine-unit project

What was the situation?

A first-time developer approached us seeking funding for a nine-unit scheme in Purley, Croydon. They had an equity investor who was putting in all the equity required, and they required funding to 65% Gross Development Value (GDV).

What was the issue?

The development finance market is not only tighter in regard to leverage post-Covid, but lenders are more selective over the types of deals and the developer’s level of experience. First-time developers are finding it increasingly more challenging to get competitive terms for higher leverages.

On top of this, most development finance lenders require 10% of total costs to be put in by the developer which meant the funding options available to the client were considerably reduced.

What was the process?

The research element of this case was completed relatively quickly due to our intimate knowledge of the market and our understanding of which lenders have an appetite for this type of deal. Tapping into our vast network, we worked swiftly to make an introduction to the client, arrange a site visit, and complete within the short space of five weeks.

What was the solution?

Through a family office we have been working closely with over the last few years, we managed to secure the funding required at £2.5 million at 65% GDV. This newly formed relationship is already going from strength to strength, as the client has already begun a second deal which now being worked on only a few months after completion of the first.

What does the client say?

The developer has been blessed with such a smooth process to complete on their first development. Thrilled with the result we were able to secure for them, the client is now very hungry to take on more projects as and when the right opportunities present themselves.

Lending solutions with LDN Finance

Are you looking to secure development finance for a new or existing project? At LDN Finance, our expert brokers have a wealth of experience in securing first-time developer finance, working closely with our trusted network of private banks and specialist lenders to arrange bespoke funding solutions to suit your circumstances at competitive, market-leading rates. Get in touch with us today to organise an initial consultation.