Throughout the deal-making process there will undoubtedly be challenges – it is rare that deals involving substantial loan amounts are agreed without potential stumbling blocks. In these situations, Signature can draw upon extensive industry experience to navigate such issues and achieve a positive outcome for all parties.
This expertise combined with an unwavering commitment to supporting developers has helped Signature build an enviable reputation amongst clients and brokers alike, delivering continual growth and success.
A highly experienced Telford-based client recently discovered the Signature difference, as they looked to secure a loan of £344k to assist with the purchase and refurbishment of an imposing three-storey office building, with large internal space.
The client recognised the opportunity to convert this building into six one-bedroom apartments, believing their experience would ensure they could deliver the much-needed dwellings.
However, the deal temporarily stalled after an initial valuation was much lower first anticipated, putting the project at risk. Signature then stepped in to conduct a detailed review of the property and subsequently agreed the valuation appeared unusually low.
Signature Relationship Manager, Sean Carbery, arranged to have the property revalued through a local, independent valuer and the result was a more appropriate estimation. Signature then worked quickly to get the deal done using the higher market value, which resulted in the £344k loan being agreed.
The borrower had already confirmed that all the necessary refurbishment works could be completed under Permitted Development, with an aggregated GDV Of £566,000 cited within the valuation report. To convert the building as intended, construction costs of £155,550 were estimated, which included the removal of stud walls, new kitchens, bathrooms, flooring, windows and external doors, as well as a full re-wire and redecoration.
Although the refurbishment was comprehensive, the demand for the property upon conversion was expected to be strong given the lack of good-quality, modern flats within the local area. This combined with its proximity to a range of amenities meant that the apartments would likely attract significant interest from investor buyers and owner-occupiers, further strengthening the long-term potential of the deal.
Signature undertook the necessary background and credit checks, before agreeing the loan on a 12-month term, which would give the developer enough time to refurbish and refinance the property onto a Buy-to-Let mortgage – an achievable exit plan given the developer’s expertise.
A local estate agent also confirmed that once the property had been split into six apartments that it could achieve a sale value of £550,000, which offered a more than satisfactory alternative exit strategy should the intended route fail.
From instruction to drawdown, the entire transaction including legals took just two weeks to complete. Given the position of the deal when Signature got involved, this demonstrates how effective relationship-led lending, supported by in-house legals and an experienced team, can be even when the process becomes challenging.
Happily for Sean and Signature, it appears the foundations have been laid for a positive long-term relationship, as the client looks to expand on an already extensive property portfolio, leaning on the support of a reputable short-term finance provider.
Sean Carbery, Relationship Manager at Signature, commented:
“Securing a deal of this nature is more satisfying than completing a straightforward, problem-free transaction, as we’ve had to reassess and overcome challenges without compromising the end result.
“We are committed to getting deals done and ensuring developers receive the support they require to ensure a smooth delivery of funds that deliver homes the country needs. Overcoming the challenges and getting the deal done within two weeks was gratifying for the team and great news for the developer.
“Our service puts our clients at the heart of our decisions. I’m pleased that another client has witnessed first-hand why we have such a strong reputation for providing seamless, first-class support that allows them to develop properties with confidence.
“Despite the early challenges, it has been a positive experience on the whole and I am very much looking forward to seeing how the project unfolds in the coming months.”
David Wells, of Q Commercial Finance added:
“Although there were some difficulties during the early stages, Signature’s ability to identify and address the problem quickly, is the reason this project is still going ahead as planned.
“For a lender to have all that expertise and experience on tap, takes away a lot of the stress and we’re grateful for the efforts of the entire Signature team, and in particular Sean’s speed of reaction to ensure the project can move forward as planned.
“We are confident that there will be more opportunities to work together in the near future and we’d urge other developers in need of short-term property finance to utilise Signature’s services and benefit from their commitment to get deals done.”