Property developments are both time and cost sensitive, and as such, the services of experienced short-term property finance providers working with professional specialist corporate fiancé brokers are needed to ensure opportunities are not missed and projects are delivered as planned.
Finance for Property Developers an experienced broker working with a Suffolk-based property developer, approached Signature Property Finance to secure a £498,750 bridging loan that was required to raise capital against two recently developed freehold properties, for the purpose of capital raising cashflow for an unrelated business transaction.
One of the properties had been purchased a few years prior, and the developer had since obtained planning permission for new homes on a piece of land attached to the site. All units had been sold, with one unit (sold STC). The original property on the land was undergoing refurbishment and not ready for market.
On completing the necessary background and credit checks, Signature agreed to provide the much-needed funding on a six-month term, which was deemed enough time for the developer to complete the sale of both properties.
Time is of the essence
The current state of both properties combined with examples of other comparable sales led to a value of £425,000 for the bungalow and £325,000 for the remaining unit. The primary source of repayment would then be the sale of the property, with a backup exit strategy outlined if sales do not occur within the six-month term.
Given the developer’s extensive and profitable property portfolio, Signature were comfortable with the developer’s vision for the project and were happy to provide a bridging loan on terms that benefitted both parties.
Signature Property Finance Sales Director, Paul Tromans, commented: “As an experienced short-term property finance provider, we understand that clients need decisions to be made quickly so that projects can be delivered within the specified timeframe. In this instance the deadline for the onward transaction was only a couple of weeks.’’
“Each member of our team has an in-depth understanding of all aspects of the property market, which gives us a serious advantage when it comes to supporting clients, as we can act quickly, ensuring development opportunities are not missed.
“After receiving the application on Friday, we had the valuation sourced and booked for the following morning, despite the logistical challenges of it being a weekend.
“Although we are happy to support first-time developers, it can be easier to provide funding when the client in question has a proven track record as an investor and developer, which is clearly the case here.
“Working with an experienced broker such as Sue Jonas at Finance for Property Developers makes the deal process easier for all involved. We listened to the client’s requirements and tailored the deal accordingly, with drawdown achieved on the terms agreed at the outset, with excellent teamwork from broker and lender – no last-minute surprises.”