Sourcing a facility for a partially completed semi-commercial development

What was the situation?

I was approached by a client who was part way through a development building new residential units above a commercial building. They planned to convert the development to mixed use, keeping the commercial units and selling the residential units in order to raise capital for their next project.

What was the issue?

Despite being an experienced developer, the client suffered issues during covid whereby the development works were delayed. In addition, the mixed use of the refurbishment made the development more complex to secure finance on, and the client didn’t want to give a personal guarantee as the project was through their limited company.

What was the process?

I sourced lenders that were comfortable with providing a facility on semi commercial assets, then I negotiated no personal guarantee using the fact that it was a low leverage case. Once terms had been obtained, I went to the client for approval. The client was in agreement and the application was submitted.

What was the solution?

I was able to approach a new lender who took a common-sense approach to my client’s case. We secured a low rate against an LTV of 30%, across almost 2 years. Although we faced difficulties throughout the underwriting process due to the directors wanting to keep the loan separate from their personal affairs, the lender was happy to accommodate this due to my client’s experience and our reputation as advisers.

After the setbacks they had already faced during the development, my client was thrilled at the outcome and our ability to secure a suitable facility.

Lending solutions with LDN Finance

Are you a developer mid way through an unfinished development? Perhaps you need development exit finance to finish?

At LDN Finance, our specialist team has extensive experience in securing short-term finance solutions suited to your circumstances – no matter the complexity. Working closely with our trusted network of private banks and specialist lenders, we’re sure to secure a bespoke arrangement for your project at competitive, market-leading rates.

Get in touch with us to organise an initial consultation.