Large interest only commercial loan on 27 apartments for developer client

What was the situation?

We were recently approached by a client who had secured a fantastic completed development of 27 apartments in Dover at a great price 25% under market value. We had secured bridging finance for the acquisition at 75% of 180-day value. We were required to source a commercial loan from a lender who was able to take on all 27 apartments in one facility to pay back the bridging finance onto a long-term deal and increase the leverage up to 75% of Open Market Value . This was so we could release money to allow the client to continue growing his portfolio on property development projects.

What was the issue?

The issue at hand was that our client had recently taken out large loans with many of the commercial lenders which meant he was at the maximum loan amounts already, so going to 75% of Open Market Value was a real challenge when there is a limited number of lenders we could approach – even though the rental yield was strong.

What was the process?

Through cultivating strong and long-lasting relationships with our trusted network of lenders, it is extremely rare that we are unable to find a solution. Despite not fitting some of the lenders’ criteria from those that were in a position to provide the client with additional funds, we successfully secured commercial loan funding from one of our core commercial lenders that was keen to support our client on the transaction on a five-year fixed rate at 4.54% p.a. and could set the whole loan up on an interest only basis which helped us maximise the leverage.

What was the solution?

As a result, we secured everything within the deal that our client was seeking and they completed the deal within the required timeframe. We have continued to build a strong relationship with the lender and the client is now working with them on two new deals. In the end, the capital raised against the asset went towards the new acquisition and our client was thrilled with the solution. Whenever our clients need us in support of their new projects, we’ll be the perfect partner – no matter how complex the circumstance.

Lending solutions with LDN Finance

Are you looking to secure a commercial loan or development finance to help you complete on a new or existing project? At LDN Finance, our expert brokers have a plethora of experience in securing specialist finance solutions to suit your individual circumstances, working closely with our trusted network of private banks and specialist lenders to formulate bespoke arrangements at competitive, market-leading rates.

Get in touch with us to organise an initial consultation.