Development Exit Funding before Practical Completion
Region:
Debt Raised:
Cornwall
£500K
Many clients come to us looking for an injection of cash at the phase of development between wind-and-watertight and practical completion. Together with a funder we work closely with, we've developed a cost-effective hybrid finance solution.
The Scenario
Our client is an experienced Cornish developer: their family-run company was working its way through a five-unit project in Falmouth with a current site value of £1.25M. They had agreed a deferred payment option with the landowner to buy the site with planning permission: £X-hundred thousand now, or with a £200K premium later. Going with the deferred payment option, our client had cash in hand to fund the build costs and the project got underway. However, when the time came to repay the landowner they didn't have a unit at practical completion. Two were wind and watertight, and the other three had groundwork and foundations completed.
A local lender they'd used before didn't have the resources for this kind of higher-risk setup. And that's not unexpected: many development finance lenders are unwilling to get involved in projects that are part-complete. By the time they came to us they needed an alternative finance solution which could be put together fairly swiftly.
The Solution
We sourced short-term finance for the £550K they needed, at a market-leading rate of 0.5% rate per month.
At this low rate they can keep their cash reserves to pay for building works, and to put towards future projects: an excellent solution all round.
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.