A broker acting on behalf of a new development company approached us with a request for funding. The business was owned by two parties, one a construction manager with considerable experience of building modern, highly specified houses and the other is an accountant with some experience of refurbishment transactions.
They wished to purchase a site with planning consent to demolish the existing house and replace it with two detached houses of modern design. The site is well located on the South Coast in a prosperous area giving us confidence that there would be a good demand for the end product.
Having completed our due diligence and being satisfied with the new company’s ability to deliver the project, we provided a loan facility of £2.44m covering half of the site purchase price and 100% of construction costs and interest roll-up.
Executive Director and Head of Development Finance, Noel Meredith commented: “Although the development company was newly formed, through our due diligence we were able to satisfy ourselves that the two principals at the company possessed the necessary skills and experience between them to be able to complete the project successfully. The site itself is well located in an area where residential sales have remained buoyant and the two contemporary properties planned will appeal to affluent purchasers looking for high quality and distinctive homes.”
GDV £4.45m – LTV 55%