What was the situation?
I was recently approached by a client who had previously purchased a site with cash pre-COVID, for which he had also secured planning to build a large commercial unit with residential units above.
What was the issue?
Since the outbreak of COVID-19, the commercial development finance market has not been a sought-after sector due to the uncertainty the pandemic has inspired. As a result, the original funders my client has lined up for the transaction pre-lockdown pulled out.
In fact, this was a widely held sentiment, as there were very few lenders in the space that were interested in any development sites with a commercial element over 25% of the total floor space.
What was the process?
The developer had to secure a strong covenant to reduce the risks associated with the volatile commercial market which was limiting the funding options available to my client.
What was the solution?
After working hard to negotiate terms on behalf of my client with a number of development funders, a large supermarket chain agreed to sign up to a long lease on the units. Interestingly, when I presented this new scenario to the original funder who had pulled out pre-COVID, they were comfortable and satisfied enough to re-offer their finance on similar terms as were offered before.
What does the client say?
The developer was grateful the lender supported him even with the uncertainty that COVID-19 has brought to the market. It was great to see all professional parties adapt to the current situation while the deal was reworked and restructured to provide a solution and get it over the line.
Lending solutions with LDN Finance
Are you looking to secure development finance for a new or existing project in the wake of Coronavirus? At LDN Finance, our expert brokers have a wealth of experience in securing commercial development 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.