Last year I was contacted by the husband of a recent client. The couple ran a very successful development firm but due to complications on a recent development, they required a bridging forward finance loan to finish building works and raise a deposit to acquire their next investment property.
Their current development was an unencumbered large house with a sizeable amount of land, ideally located just outside London. It is within the nature of the property development business that projects are developed and moved on in rapid succession and my clients had proved particularly adept in their occupations. The current project property had been valued at £1.2million after all developments had been completed.
Time was, therefore, critical in this case. Their previous builders had gone into liquidation whilst works were outstanding on their current development and they did not have a new ‘new build warranty’, a pre-requisite when conducting major works to a property.
The issue was that whilst my clients were still having trouble finishing their current project property, they did not have the finance available to move on to developing their next property- something crucial to the success of any property developer.
My clients therefore, required a forward finance bridging loan. Forward finance is where a loan is secured against a future development. It is a good way to raise finance quickly if you are a property developer with a solid exit, something which my client had in their forthcoming development.
Approaching my chosen lender, one of the most efficient and best in the business, I was helped by the fact that my client had managed to secure a renewed ‘new build warranty’. I was also helped by my clients lack of debt on their current development, making it easier to lend against.
This put me at a hugely advantageous position going into the negotiations with my chosen lender, with whom I already had an excellent relationship with, and terms were duly offered.
My client received the total amount required, £174,000 at a rate of 0.89% over a period of 12 months. My clients were delighted and they were able to finish the works on their current property and move on to their next project. The couple in question look forward to working with us in the future.