Third time lucky bridging loan for portfolio property developer

THE SCENARIO

property developer with a portfolio of between 35 and 40 properties spread across the UK. This client was working on a project near Dover, for a house he had originally bought for £800,000 on a 12 month bridging development loan. The property had a gross development value (GDV) of £2 – 2.2m. My client came to Enness following an unsuccessful run with not one, but two different lenders, after the initial 12 month loan did not go to plan. It is common knowledge within the market that to have a loan accepted when it has already passed through 1 or 2 other lenders is very unusual. My client was in need of a £1.1m loan to pay off the existing lender who had first charge on the development. One of the main challenges was that the loan to value (LTV) was high, given the valuation of £1.45m. They also needed proof of income to show the loan could be serviced, which equally had the potential to be problematic for a property developer. All things considered, I knew that the most significant obstacle for the lender was security, and that a lender would require equitable charge across my client’s portfolio. This was largely due to the fact that the property was only part-completed, which is often why many lenders tend to steer clear of part-finished developments.

OUR SOLUTION

Luckily, I already had an excellent relationship with a third lender who was happy to come to an agreement. I knew a bridging loan would be our best option, as it would allow us to offer multiple equitable charges across the property portfolio as extra security for the lender. I also managed to acquire an extra 6 months for my client to finish the property and complete a sale. I managed to secure a bridging development loan with a rate of 1.15%, as well as increasing the size of the loan.]]>