What was the situation?
Our client, an experienced developer, was looking to purchase their next development site and agreed to buy a plot which had planning approval to build 8 semi-detached houses. They came to me requiring funding for the acquisition and development costs.
What was the issue?
Due to the nature of this application, I had to factor in that due to cashflow constraints from other projects, the client required a high leverage facility. The vendor had also set a very tight timescale for completion to coincide with their other business interests. The short timescale would also require a commercial view to be taken on several due diligence points.
What was the process?
I needed to source two lenders who were comfortable working together to obtain the high debt amount that was required by our client. Due to the tight completion timescale, it was important to select two lenders that had collaborated in the past. This ensured a streamlined process and working compatibility as the required infrastructure/agreements between the two lenders were already set-up.
What was the solution?
We arranged a senior debt and mezzanine debt facility to provide a leverage of 75% LTGDV (Loan To Gross Development Value). Several pre-completion issues were raised during the due diligence process which could have prevented the transaction from proceeding. However, because of our existing relationship with the lenders, we were able to negotiate all the pre-completion issues by either having them waived, indemnified, or by providing alternative information to satisfy the lenders/solicitors.
Through working in tandem with the lenders and the respective solicitors, this enabled us to complete within the required timescale thereby leaving our client extremely satisfied.
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