Signature Private Finance helped an experienced property developer overcome the ongoing uncertainty caused by the COVID-19 crisis, by providing a £68k bridging loan for the purchase and renovation of a Bristol property.

“Given the current climate, it’s a breath of fresh air to have the support of an alternative lender, like Signature, who understand the market and have first-hand experience of handling similar projects. There were no unnecessary headaches throughout the entire process, as they understood and could recognise the long-term viability of the project and what we were trying to achieve."

Property developer in Bristol

Recognising the long-term vision

An experienced property developer, with an existing portfolio of two currently let properties, required assistance with the purchase of a Yatton-based property and subsequent repairs to the rear roof and water affected timbers.

Centrally located, the property is a large two-bedroom flat/maisonette, surrounded by similar properties in what has become a sought-after location for locals, with great transport links for commuters into Bristol.

Given the existing market, the subject property was estimated below market value and in need of refurbishment, with a significant figure needed to bring the property up to standard, including substantial repairs to the roof.

Whilst following social distancing rules, the property was visited by a member of Signature’s valuation panel who highlighted the property’s issues, none of which deterred our commitment to lend in line with the deal agreed at the start of the application process.

Finding the perfect solution

Given the uncertainty caused by Coronavirus and the Government lockdown, some developers have found it difficult to secure the financial support needed for their developments. However, through our own due diligence and assessment process, we could see the long-term viability of the project and trusted the developer to deliver it effectively.

Our bridging loan allowed the developer to purchase the property and make the necessary improvements/repairs, so that it could then be refinanced onto a BTL loan.

The loan required equated to a satisfactory LTV against the OMV at the time, with the developer also contributing to the purchase of the property, in addition to further personal funding to complete the remediation works on the roof.

With extensive knowledge of related markets and a clear understanding of how the development would be structured, we agreed the bridging loan of £68K to assist in the purchase of the property, with an expectation that the bridge would be cleared within six months once the repairs and term loan application had been completed.

The exit route would become clear once all repair and refurbishment works had been completed, with the primary source of repayment coming through a BTL loan, although the developer could review their options, with a sale of the property also a suitable exit.

“The uncertainty caused by the global pandemic has been very disruptive for developers and their ongoing projects. Now more than ever before, developers need reliable lenders, like Signature, who can agree a deal quickly, before the opportunity passes by. And despite the issues with the property, Signature was again able to do what we say we will do and deliver a deal on the same terms as agreed at the start.”

Andy Neocleous – Relationship Manager, Signature Property Finance