What was needed?
Our client in Fargate was looking for a development loan in order to develop a property investment that they had acquired but lacked the capital to complete the development.
We looked at a number of options and decided that development finance was the right solution for our client.
What did we do?
We went through the project in detail in order to understand the client’s situation as well as their experience and track record of success.
We agreed with the client that development finance best suited their needs until the completion of the agreement where they would refinance and see longer term financial arrangements.
We shopped the market with our exclusive panel of lenders and presented a number of options to the client.
The Loan To Value, or LTV, of this finance was 70% of the total cost of the project. That meant that our lender provided 70% of the capital, with the client providing 30%.
An interest rate of 4.5% per annum, or per year, was agreed between the lender and the client, total value of the loan which was £10,000,000.
The loan was agreed over 24 months so the client borrowed and repaid over a period of two years.
The exit for the client was to renegotiate longer term finance once the project had been completed, using the new finance to pay off the previous, but agreeing it over a longer period now that the property was more valuable.