£8.5m development finance loan without personal guarantees

What was the situation?

I was approached by my long-standing developer client who had identified a large single unit property with development potential in Surrey. Their intention was to build a build a c.13,000 sqft property with an estimated £15 million GDV (gross development value), to sell for profit.

Prior to development, the property purchased was a 5 bedroom family home in need of modernisation. The client intended to demolish the existing house and develop a large, modern family home in it’s place.

With a £3 million deposit, the client wanted to borrow almost £8.5 million in order to acquire and fund the development work. They were looking for a lender who could lend money on day one to assist with the acquisition and fund 100% of the build costs in tranches. The client was also insistent that they did not want to provide personal guarantees (PGs).

What was the issue?

There were some complexities with securing funding on this case, predominantly because the property was a large single unit property outside of London. In this instance, some lenders are not comfortable with this type of security and location, however, with our extensive knowledge and experience of the market and the lending options available, I was able to identify three lenders that met their criteria.

What was the process?

Once the three lenders had been identified, I was able to assess the most competitive lending for the overall project and work intended. Using my long-standing relationships with the underwriters, I managed to negotiate terms based on the clients requirements. In doing so, I was able to get the lender comfortable with no PGs from the client, as per their request.

With cases like this I go above and beyond to make myself available outside of generic working hours to all parties in the transaction to ensure a smooth and hassle-free process. When there were delays or issues that arose, I took it upon myself to contact the parties involved to find a solution to ensure all parties were comfortable and happy.

What was the solution?

Following my negotiation, I secured lending of the client’s desired amount which covered 100% of the build costs. The client received a competitive rate on a 24 month term; 20 months construction and 4 months sale. I had the PGs removed and the early redemption fee waived to benefit the client.

The client proceeded with the development as planned and were over the moon to secure the facility as desired!

Lending solutions with LDN Finance

Are you a property developer looking for a multi-million pound loan for a development outside of London?

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.