Structured Finance funds 100% of site purchase

United Trust Bank’s Structured Finance team was approached to provide the funding to enable an experienced developer to purchase a site for their next project. The site, in West London, was near a derelict Grade II listed house with planning permission for the construction of two additional 2,250 sq ft homes in the grounds. The client wished to borrow 100% of the £1.5m purchase price and needed the funds quickly in order to complete the deal.

The security proposed was the site itself plus the developer’s main residence. Once finished, the renovated house would have an estimated value of approximately £2m and the two new homes would be valued at around £1.2m each. The developer’s main residence, a 5000 sq ft home, was itself extended and improved by the developer and was valued in the region of £2.5m with a minimal mortgage attached. UTB would take a second charge over the property.

The client also needed to evidence that he had sufficient cash to commence work on the site. The developer’s current project was a 4 unit build with a GDV of £3.1m. One unit had been sold, reducing the outstanding debt to circa £0.25m, and a further unit was under offer. The sale of this and the remaining two units would provide the developer with sufficient profits to fund the renovation and build on the purchased site and leave a surplus.

The developer was experienced in renovating Grade II listed buildings and expected to complete the project, including the new builds, within 2 years. The Structured Finance funds 100% of site purchase finance term was extended to 24 months with a view to the exit coming from the sale of the completed homes.

Borrower Developer
Loan Amount £1.5m
Loan Type Structured Finance
Location Greater London
Project type Self-Procurement
Renovation of Grade II listed building plus construction of 2 new build family homes
Special Features Loan is to provide 100% of purchase price of development site.
Proceeds of sales of developer’s current project will be used to fund build costs
Security is target site plus borrower’s current residence
Term 24 months