Signature Property finance approached by broker to arrange £460k bridging loan to facilitate the purchase and development of multiple properties in Crewe, by a new developer with only a few years’ experience of using short-term property finance.
“I was impressed Signature were prepared to walk the site and get their hands dirty to understand my vision and the potential that exists locally. There are plenty of opportunities across Cheshire and now I have a resourceful funder on which to call, the next properties will be along soon.”
A practical project
The developer was purchasing a number of connected properties in Crewe, comprising a two-storey building arranged as four ground floor retail units and a flat, with storage space above.
The proposed development would also include two smaller units and a flat adjoining the main property on a prominent road in the town, just a mile from Crewe town centre and within walking distance of the mainline railway station.
Recognising the good location and the need for long-term high quality lets to meet demand driven by the imminent influx of workers to deliver the HS2 infrastructure project, the property needed to be re-configured to maximise living accommodation.
Details of the project were brought by Empire Commercial Finance, who recognised that for an inexperienced developer, Signature Property Finance represented the best option to secure the necessary funding.
A Signature solution
This type of purchase and development, is tailored-made for Signature, with an expectation that the purchase loan will be refinanced into a refurbishment facility once planning has been granted.
Once we have confirmed the property fits our acceptable property criteria and has at least four walls and a roof, then we can talk short-term property finance, with a determination to lend.
When considering ambitious developments of this nature it is critical for the team at Signature to meet with the clients in person and understand the developer’s vision and ambition. So much more about a deal can be understood with a site visit, than just looking at figures on a balance sheet.
Visiting the site and listening to the developer’s enthusiasm as he explained his plans for the site, made a lot of sense. It also ensured an easier decision not only for the initial purchase loan, but subsequent refurbishment loans as the project gathered momentum.
The loan was agreed with a second charge over the developer’s residence combined with the open market value of the properties being purchased, before their value is increased through refurbishment and changes in use.
“Martin had a good business plan, but it was tough to see the development value considering just figures on a page. But once we visited the site and Martin walked us around explaining his vision, it was easy to see the potential – then it was just a matter of arranging the right bridging loan.”
Tony Gilbertson – CEO Signature Property Finance