Experienced property development company had their High Street Bank pressurising them to repay their development finance loan. Applicants paid down most of their loan to £150k remaining. Unfortunately, by the bank forcing this, they used their cashflow which would have finished the project.
The newbuild development of 9 flats was a single block, whereby the property had just had the roof put on. The introducing broker was trying to help the applicants secure finance but the expensive development finance (including monitoring fees) and bridging finance options, were a stumbling block.
We were approached to look at none development finance/normal bridging lenders schemes for said broker/applicants. The challenger banks were a hybrid option however to meet their criteria the property needed to wind and watertight. Fortunately, the windows and doors were to be fitted the following week.
Having done a number of these, we approached Shawbrook Bank and requested £500K, this was to repay their Bank loan and give them £300k to finish the project and c.£50k was held back to service the loan, therefore the applicants didn’t have to repay anything for the term of the loan.
The introducing broker was delighted as he received 50% of the proc fee (1.95%) of which he received 0.975%, very close to what he would have received by going direct to the market, typically 1%. However more importantly his clients were delighted to secure this facility at reduced cost of other funding suggested whilst also providing them with additional time to achieve sales.
Once finished the applicants used a mixture of flat sales and BTL re-mortgages which redeemed the loan in full, well within the term.