Experienced short-term property finance providers recognise the vision of a proposed project and work quickly to offer much-needed development loans on terms that suit the needs and requirements of the developer in question.
Whilst a developer’s expertise and track record will help streamline the process, it isn’t the deciding factor, as seen when Signature Property Finance supported a recently formed company with the purchase and renovation of a three-bedroom terraced house.
The project came to the attention of Signature, after the client anticipated obtaining a Buy-to-Let mortgage on purchase of the property, but this was prevented when the valuation flagged some damp repair works, which the seller was unable to undertake due to a lack of funds.
The clients, who had previously completed other ‘tart & turn’ projects, decided they would acquire the property via a bridge to complete the replastering and refurbishment, before reletting and refinancing the property. Once Signature had conducted company searches and established the client’s clean credit record, they were happy to move forward with the project.
Through the provision of a gross development loan of £150,000, the clients would be able to meet the agreed purchase price of £200,000 for the Peterborough-based property.
Once acquired, they would address the damp issues by repairing a couple of affected walls before replastering and redecorating the property, transforming it into a six-bed HMO using the client’s own personal funds.
Signature agreed to offer the funds on a 12-month term with interest deducted for the period. The proposed exit route would involve refinancing the property onto a Buy-to-Let mortgage following its refurbishment.
The loan was well within Signature’s policy, giving them confidence that the project could be achieved within the strict time and budget estimations that had been outlined.
Bob Stones, Relationship Manager at Signature Property Finance, commented: “The success of the project hinged on our ability to respond quickly, conducting the necessary checks so that a deal could be secured and the client could proceed without delays.
“As always, our team worked tirelessly to agree a loan on terms that suited the developer and we delivered on the terms agreed at the outset, offering them the support needed to achieve the project’s vision.
“Whilst many of clients have decades of development experience, this is an example of our willingness and commitment to assisting clients earlier in their journeys – as long as we are confident in the credentials of the individual and the project, then we are always happy to help.
“As such, we are very much looking forward to supporting the client in the months ahead and confident we will assist them on further developments in the future.”
The developer added: “After being alerted to the issue of dampness, we realised the entire project could be missed if we didn’t engage a short-term property finance provider that had the expertise needed to agree a deal quickly.
“After meeting Signature, we knew they were the right lender, as they took the time to understand what we were trying to achieve, whilst working closely with us to agree terms that suited our limited time and budget requirements.
“We would definitely recommend their services to any other first-time developers looking to source much-needed finance, without any nasty sting in the tail when it comes to drawdown.”