Development Exit Funding – pre practical completion. With weeks left with their current lender.
Region:
Debt Raised:
Suffolk
£1.8M
The Scenario
Client was in a tough situation, due to a couple of elements out of their control during the build, they lost 2 months build time (it happens). However the previous advisers had only put a 12 month term together and the lender would not extend the terms. The client was facing losing both properties (literally 2 months from completion) and bankruptcy.
At the end of developments, extensions with another lender can usually be sought (designed to extend the sale period of the properties and lower the rate due to the values increasing), however only if they’re both at practical completion (PC) and sign off. Both of these properties were not at PC.
The Solution
With no other assets for the client as 100% was invested into this development, we managed to work with the lender to refinance and prioritise one property to PC within a couple of weeks of the refinance. Securing the value uplift and lowering the overall loan to value/exposure. We then refinanced (at no cost) using the higher valuation and funded completion of the second property within 2 months. The properties are now both on the market for well in excess of seven figures.
When we’re faced with a situation like this, our view is that if there is value in the asset/s, then there must be a workable solution – even if there is not an ‘off the shelf’ option on the market.
Developing this hybrid, pre PC product was great to deliver and the client has now not only completed both properties, they’re now looking at their next development.
Similar?
If this sounds like something you would like to do, it’s worth us having a 5/10-minute conversation. It costs nothing to talk through and even if we don’t find the immediate solution, we can certainly advise and plan how it can be achieved.
Get in touch here or use the form below, we can call you during the day or evenings/weekends.
Let us know when suits and we’ll find a solution/make a plan.