What was the situation?
Recently, I was approached by a client who was in need of part-built development finance. The developer had suffered multiple delays with construction post-COVID and, as a result, was under pressure from the existing development lender to refinance. If he failed to do so, the deal would be put on auction for sale. There was a potential planning uplift in the future, but unfortunately, this could not be guaranteed.
What was the issue?
The main issue was that there was still a considerable amount of construction works to be completed. If placed on auction at this point and valued by a surveyor to assess its worth, the valuation would be so low that it would be impossible to go through with any new lender.
Not only this but the loan to value (LTV) was already very high and the client was paying default interest which was quickly eroding the project’s profit.
What was the process?
Using my industry resources, I researched and sourced a small lender who was able to lend at 75% gross development value (GDV) without focusing on the current value of the asset. They were also able to proceed without a valuation which saved time and money.
What was the solution?
The client was incredibly grateful for the monumental effort from the whole Specialist team at LDN Finance to find a solution. The developer feels he will be able to do multiple deals with the lender in the future and they are looking forward to building a strong long-term relationship. The client has now secured a planning uplift and the lender now sees the deal as very much de-risked.
Lending solutions with LDN Finance
Are you looking to secure part-built development finance for a new or existing project in the wake of Coronavirus after encountering delays?
At LDN Finance, our expert team has 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 with our brokers today to organise an initial consultation.