In recent years, Signature’s reputation as a reliable short-term property finance provider has given them an opportunity to support some of the UK’s most successful developers, as their keen eye for detail and ability to agree deals in quick turnaround has attracted widespread attention.
Leaving no stone unturned, Signature’s experienced team understand the need for professionalism and efficiency, agreeing deals on terms that meet the expectations of the client. This commitment to finding the best possible solution has helped thousands of developers deliver on their promises, addressing the UK’s housing crisis one project at a time.
Once again, this expertise was demonstrated after the firm was approached by a highly experienced developer in Fife, Scotland. The client required a significant development loan of £2,050,000 to develop 20 new build residential units against a freehold property.
The proposed development would be carried out in a single phase using in-house labour and subcontractors that the client had previously used, at a total estimated cost of £3,651,783 over 15 months. Following the completion of thorough, independent inspections, this estimation was deemed to be accurate, especially given the proven track record of the developer and their involvement in similar sized projects.
To facilitate a deal of this size, the gross loan facility was agreed on a bespoke basis and aligned to the development cashflow. According to this structure, redemption of the £2,050,000 loan could be achieved within approximately 12 months, however a 15-month term would give the client enough time to carry out the development and sell the units.
The structure was confirmed to be within policy, with Signature’s funding set to peak in months six and seven, prior to the sale of four units to a third party. From month eight, the gross loan balance would gradually be settled, allowing the final three months for the developer to arrange the sale of the units.
With an estimated value of £175,000 – £350,000 for the range of three and four bed-properties, the completed development was expected to generate significant interest, especially given the strong demand for housing in that area and the close proximity of important transport links.
As such, the primary source of repayment would be the sale of the completed houses, with a secondary exit route of renting the properties available as backup. As always, Signature first completed all the necessary background and credit checks to confirm the project could be delivered as promised, before confirming the loan.
Of course, the developer’s extensive experience of completing largescale multi-property projects made Signature’s decision to loan an easier one to make.
Alan Coats, Lending Manager at Signature Property Finance, commented:
“The fact that well-established development firms with large property portfolios are approaching Signature for six-figure support stands testament to the first-class services we deliver.
No matter how big the development may seem, our in-house team of property experts have the knowledge and experience needed to help clients, agreeing suitable terms that will ensure a successful project delivery.
Of course, the structure of the deal had to be decided quickly so the project could move forward within the strict time and budget requirements. Once we were satisfied with the details of the proposal, then everything could proceed as planned.
As such, we are very much looking forward to working with the developer on this project and more like it in the future.”
The broker who introduced the opportunity added:
“Following the successful delivery of an earlier project with Signature for the same developer, along with their willingness to create a bespoke peak-debt structure for this new loan to minimize the borrowers equity contribution, we were assured by the offer made by Signature and had the confidence that they would back the terms up with a fast completion to enable the acquisition of this site.
To ensure a project of this size is delivered without delays, it is vital that borrowers have the backing of an experienced Broker and Property Finance Provider who understand the unique pressures and challenges attached to developments of this scale and structure.
Having delivered with Alan on multiple other projects in recent years, he and Signature ticked all the boxes in that respect, as their flexibility, speed and doing that they say they will has allowed us to secure a flexible solution so that the borrower can complete the project as per their cashflow.
I would recommend Signature without hesitation for projects where their product represents a strong fit for the borrower and their project.”