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Real Estate Fund for "Topco"

Thu, 26 Jan 2023 13:16:36 GMT

Real Estate Fund for "Topco"...

+ This large fund has £20 Billion Assets Under Management

+ The Fund prefers small to mid-cap businesses

+ “Patient” capital for sectors including PBSA, Co-Living, any asset generating income

+ Structure can be debt, equity, or preferred shareholding

+ Like “cradle to grave”, which can mean from planning gain to creation of a portfolio platform

+ Willing to hold the portfolio over a period of 7 years or more

+ The Fund requires a return of x2 capital deployed

+ Fund willing to deploy £50 Million to £200 Million on any one Topco

+ Topco is expected to flow funds down into diverse real estate projects.

Working capital for solicitors...

Thu, 26 Jan 2023 09:28:57 GMT

working capital for solicitors...

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VAT Loan Solutions

Tue, 23 Aug 2022 11:16:19 GMT

VAT Loan Solutions...

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100% Joint Venture Funding Case Studies

Tue, 26 Jul 2022 14:45:08 GMT

100% Joint Venture Funding Case Studies

1 Unit In Cheshire 3000 sq ft house in a pleasant area, on a 12 month deal:

£250,000 PP inc SD

£417,500 Build Costs

£980,000 GDV

Interest charged at 1.25% - £68,812 in interest costs

£233,888 left for the profit share after agents fees = £116,944

4 Bungalows in Stafford, on a 12 month deal:

£452,652 PP inc SD

£673,757 Build Costs

£1,560,000 GDV

Interest charged at 1.5% - £142,115 in interest costs

£275,876 left for the profit share after agents fees = £137,938

Purchase of a dilapidated bungalow in the Midlands with planning for 9 houses, on a 15 month deal:

£577,500 PP inc SD

£70,000 CIL

£1,279,410 Build costs

£3,100,000 GDV

Interest charged at 1.25% - £241,350 in interest costs

£900,740 left for the profit share after agents fees = £450,370

To appraise a deal generally we require the following:

· Build cost appraisal

· Term for the loan to build and sell

· GDV breakdown

· How the site was sourced

· CV

Latest Case Studies

Mon, 04 Jul 2022 12:52:47 GMT

Latest Case Studies...

An update on case studies from our finance partner:

Wages only: A contractor complained to me that he was tired of 'working just for wages' and making everyone else big profits. By way of our various development solutions, including equity investors, we have ensured that our contractor no longer 'works just for wages'.

Stop Start: A developer with around 5 years experience and circa £500,000 of capital, bemoaned that he funded his own projects because his own bank confused him. The problem was that he built out a project and then had to await the sale of the newly built units before he could consider the next project. Hence the 'stop start' complaint. However we showed him how we could obtain 95% of project costs with no profit share to maximise his capital. Furthermore, we showed the client how our equity investors could help, thereby allowing him to be running at any one time at least 4 projects simultaneously. This has allowed the developer to really 'scale up'.

No Capital: An ambitious first time developer approached our office with a potential scheme that was very profitable. Unfortunately the developer had 'no capital'. However, the landowner was very bullish about the land sale and helped by agreeing to defer some of the land purchase price. Furthermore, we arranged senior debt to ensure 100% of all other costs were covered. Finally, the developer earned 100% of the profits.

Minimal Capital: A newco developer was created by three individuals, with minimal development experience and minimal capital to invest. Their first project was to buy a freehold hotel off the administrators and convert it into apartments. By way of our professional contacts, a funding package equating to 95% of project costs was arranged. Furthermore, this office arranged for the apartments to be pre-sold to one of our long term residential investment funds. Finally, the client retained 100% of the profits despite the 'minimal capital' invested.

New Residential Funding Criteria

Mon, 09 May 2022 12:31:44 GMT

New Residential Funding Criteria....

Please see below, detailed criteria from an overseas fund just entering the UK marketplace.

RESIDENTIAL BUILD TO RENT REQUIREMENT

- Multifamily housing

- Lot size - between £30-£50m

- Typically 100-300 units

- NIY of greater than 4.25%

- Targeting regional locations such as Nottingham, Leeds, Sheffield, Newcastle, Edinburgh and outer M25 locations

- IRR 5.5%-6%

- Strong ESG credentials

- Operational / Forward Funding / Forward Commitment

RESIDENTIAL STUDENT REQUIREMENT

- Strong regional locations with Russell Group Universities

- Lot size – Between £15M - £50M

- Gross yield of greater than 6%

- Operational / Forward Funding / Forward Commitment

- 3.5% direct return

RESIDENTIAL LAND REQUIREMENT

- Strong regional locations – preferably commuter locations within proximity to railway stations
- Pre (preferably) or post planning opportunities
- Consider short term income or vacant possession of office buildings
- Preferably with a car park
- Redundant industrial or tertiary sites misplaced in town centres
- Scale – ability to deliver between 100 to 350 units
- Land value or existing use value of £1 - £10M

Mezzanine, Stretched Development & Bridging Finance

Tue, 03 May 2022 11:14:31 GMT

Mezzanine, Stretched Development & Bridging Finance...

Funding throughout the United Kingdom.

Mezzanine:

Charge: 2nd charge security
Facility Amounts: £300k to £10m
Interest Rates: 16 – 18% (sustainable projects ) 18% - 20% (traditional projects)
Term available: 3m – 18 months
Lending parameters: 75% LTV 75% LTGDV 90% NET LTC
Applicable Opportunities: Residential ground up and PD, mixed use

Stretched Development:

Charge: 1st Charge Security
Facility Amounts: £1.5m to £10m
Interest Rates: from 9.6%
Term available: 12m – 24 months
Lending parameters: 75% LTV 75% LTGDV 90% NET LTC
Applicable Opportunities: Residential ground up and PD, mixed use

Bridging:

Charge: 1st and 2nd charge security
Facility Amounts: £300k to £10m
Interest rates: from 0.65%
Term available: 3m – 18 months
Security: Personal Guarantee, Corporate Guarantee, Company Debenture
Lending parameters: 75% LTV

Applicable Opportunities: Residential investment, PD, mixed use, Planning Gain

UK BTL property finance for non-UK residence.

Mon, 02 May 2022 11:55:14 GMT

UK BTL property finance for non-UK residence.

Lending Criteria:

Property values up to:

£1.5m London zones 1-2,

£1m London zone 3,

£500k for the rest of the country.

LTV 70-75%,

minimum loan £75k,

loan term: 5-25 years,

interest rates starting at 3.36% (as at April 2022),

investors only, Buy-to-Let,

Approval in principle within 48 hours with formal approval (subject to valuations) within seven days of the application fees being paid.

Investors from the following countries considered:

Australia & New Zealand,

Canada,

India,

South Africa,

USA,

Mexico,

Brazil,

France,

Germany,

Switzerland,

UAE,

Qatar,

Saudi Arabia,

China (Mainland) & Hong Kong (SAR),

Japan,

Brunei,

Indonesia,

Macau,

Malaysia,

Philippines,

Singapore,

South Korea,

Taiwan,

Vietnam,

Hospitality Fund

Thu, 23 Dec 2021 10:15:18 GMT

Hospitality Fund (£10m-£500m)

Our funding partner is working with a specialist fund that focuses on the hospitality sector i.e. hotels, leisure etc.

The fund offers the following facilities:

Debt by way of term loans
Three year stabilisation facilities
Equity
The fund will also acquire venues. The minimum advance is £10 million and the maximum advance is £500 million.

The geographical areas of interest are the UK, US, Caribbean, Spain, Greece and Ireland. Other main European jurisdictions considered on a selective basis.

Latest Development Fund

Sat, 27 Nov 2021 11:58:52 GMT

Latest Development Fund...

*Lends in UK, Italy, Poland, Holland, Spain and Germany

*Minimum loan €10m

*Maximum loan €50m

*Minimum term is 2 years.

*Maximum term is 7 years

*Will lend up to 75% to 80% loan to value

*Interest rates from 3.5% to 10%

*All sectors considered except healthcare. Particularly like hotels, student accommodation, office blocks, shopping centre, hypermarkets and refurbishment schemes.

Refurbishment Funding

Sat, 27 Nov 2021 11:54:42 GMT

Refurbishment Funding...

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European Investment Fund

Wed, 03 Nov 2021 16:45:18 GMT

European Investment Fund...

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A Unique Lender Providing Unique Facilities: Loans £5m-£250m

Thu, 28 Oct 2021 16:16:56 GMT

American Hedge Fund with $36 billion Assets Under Management...

We have access to an American Hedge Fund with $36 billion Assets Under Management. This fund has a philosophy of structuring a funding facility to suit the needs of the SME client. The profile of such facilities is outlined below:

• Minimum loan £5 million

• Maximum loan £250 million

• Maximum term for 5 years

• Interest rate range from 3% per annum to 7% per annum

• Interest only facility available

Typical security required are:

- Receivables/Debtors

- Inventory/Stock

- Plant & Machinery

- Real Estate

• No asset class mix restrictions

• All SME sectors considered

• Additional cash-flow lends considered

• SME's located in U.K, Europe, Scandinavia and North America

Funding Situations:

- Mergers and Acquisitions

- Refinance to release capital

- Turnaround/Restructuring/Insolvency

- Special Situations

- Event/Change Driven Scenarios

- Bridging back to stable position

- Shortfall with current borrowing

Examples of SME's assisted are as follows:

A major import/wholesaler was in trouble due to Covid. There was a requirement for flexibility in relation to the receivables/debtors facility because some customers would not pay until 200 days had lapsed. The fund created a unique facility concerning the debtors as well as providing a revolving credit facility secured by the inventory/stock in the warehouses situated in the USA, U.K and Europe.

A management team wish to buy out the owners of the company. This funder provided a flexible facility secured upon the debtors, the stock, the plant and machinery and the building. In addition to this a term loan facility based upon the EBITDA of the business.

A 2 year term was provided secured upon a portfolio of hospitality businesses to free up capital for the SME to refurbish the properties with the intention of refinancing after 2 years by way of a more traditional term loan.

Forward Funding of Property Developments Throughout Europe

Sat, 09 Oct 2021 13:52:23 GMT

Forward Funding of Property Developments Throughout Europe...

We have access to a fund that has circa €1 billion to deploy on the following basis:

Forward Funding: To buy the land and "build to suit".

Sectors:

Supermarkets

Nursing Homes

Warehousing/Logistics.

Criteria:

The asset should have a long lease to a single tenant.

Speculative land purchase only where warehousing/logistics is involved.

Minimum ticket size: €20 million.

Maximum ticket size: None.

Location: Throughout Europe as far East as Lithuania

Investment Sample:

A Sainsburys in Scotland

A Co-operative in Denmark

An Amazon warehouse in Poland.

Finally, as an example, if you have a client who is a nursing home operator who wishes to expand and operate only a further 6 new builds (i.e. no interest in owning the bricks and mortar) subject to the strength of the tenant/operator, this fund will forward fund the build out and retain the asset for the long term yield.

Innovative Development Facilities up to £5 million

Thu, 07 Oct 2021 17:03:00 GMT

Innovative Development Facilities up to £5 million...

• Pre-Sold With Deposit - 100% funded where a project of, possibly apartments, are pre-sold to a Housing Association etc who exchange contracts and provide a 10% deposit, these deposit funds can be accepted in lieu of the developer's contribution. Thereafter senior debt funding can be provided up to 75% LTGDV.

• 100% Funding - We have a senior debt provider who will provide senior debt up to 75% LTGDV and equity on a second charge loan from one of the lender's equity partners.

• Vendor Deferred - Where a landowner is happy to defer some of the purchase price of the land, a senior debt provider will allow the landowner to take a second charge behind the senior debt provider. Furthermore, the senior debt provider will view the deferred element as a contribution by the developer and provide the rest of the funding. Hence 100% funding.

• Lending Against Planning Gain - If a developer secures a site through an option agreement and obtains Planning Consent for the land, a senior debt provider will provide 100% of the land purchase price and 100% of the build costs. The senior debt provider will view the planning costs to date and the enhanced value as the developer's contribution to the project.

Equity Funding Platform: 100% equity facility for developers.

Tue, 28 Sep 2021 11:54:51 GMT

Equity Funding Platform: 100% equity facility for developers.

Fully Funded Residential Development: Guidelines for Developers

Location

o UK wide - excluding inner London(ie not within North and South Circulars).

o Product appropriate attractive locations.

o Demonstrable demand

Property Type

o 5-20 units typically over a single phase;

o Ideally 3-5 bed family housing albeit a small number of apartments could be considered;

o May consider PD for the right scheme;

o Traditional Build;

o Price point up to circa £1m in unit values,£800per sq ft max subject to local values

o Must have planning

Developer Profile

o Experienced developer;(young teams with relevant professional background considered)

o Existing and demonstrable track record;

o Strong preference for developer procuring via sub-contract management

o Will consider 3rd party contractors on JCT basis;

o Will recognise land gain where the developer can show they have added value. (and willing to consider a release of a proportion of such equity on Day 1)

o 100% equity for those with suitable track records etc

o We seek long term relationships, not one off transactions

o Due diligence process undertaken to approve developer as partner.(thereafter repeat scheme decisions based on project)

o Willingness to engage in sustainability objectives.

Project Financial Profile

o Senior interest normally rolled up

o Typically requires min 25% ROC.

o Senior debt arranged (0.5% fee to project). Will accept developers lender subject to suitability.

o Term 18 to 30 months. Typically 12 month build then sales period determined by volume

JV Terms

o £0.75m to £3m equity .Will consider and will go materially larger for mixed use schemes

o 7% priority profit-share on equity (as look -back IRR),then

o Profit shares typically between 40/60 to 60/40 subject to scheme returns

o May require min’ fixed multiple .Will negotiate alternatives.

o Typically 100% equity to approved development partner.

Senior Lending

o Typically 60% GDV on senior, max 65%

o Established reputable lenders

o No mezzanine or split capital stacks.

Structure

o JV structure .Vehicle will be a fund SPV (UK LLP);Normally fund and Developer as partners

o Developer contracted through an LLP Agreement and DMA which covers profit sharing arrangements.

o Developer responsible for cost-overruns

o Developer provides cost-overrun guarantee to senior debt provider

o Fund normally provides interest cover guarantee to debt provider.

o Full step-in rights for breaches.

o Materiality clauses for variation to spec’

o Key man cover required if appropriate

o Professional Industry Insurance required

o Straightforward legal documentation

Forward Funding of Residential Housing Projects

Mon, 27 Sep 2021 16:25:16 GMT

Forward Funding of Residential Housing Projects

We are working with a major investment fund that wishes to retain within their portfolio newly built housing stock which is rented out to single family units.

The ideal project profile is:

• Minimum 40 units

• Preferably 100+ units

• 2/3 bed houses

• Low rise 1 or 2 bed apartments

• Near transport hub and employment

• Will look at sites that have stuck around for a while needing a re-think

• Solid location for rental but maybe not ideal for selling.

The procedure is:

• The investment fund will buy the land off the developer or landowner

• The investment fund enters into a J.C.T contract with the developer to build out the units.

The advantages to the developer:

• Security of income

• Guaranteed profit margin

• No finance costs or marketing costs.

Forward Funding Throughout Western Europe

Mon, 27 Sep 2021 16:22:04 GMT

Forward Funding Throughout Western Europe

We are working with a specialist investment fund that is focused upon the following sectors:

• Student Accommodation (200 beds plus)

• Build to Rent (150 to 250 units)

• Social Housing (especially overseas)

• Co-living

• Housing Estates to build and then rent out. These will be single family units. Minimum number per project is 100 units and the maximum number is 600 to 700 units.

• Senior Living.

The geographical locations for the above projects include:

• U.K and Ireland

• Nordic Areas

• Netherlands

• Germany

• Spain

• Portugal.

As the investment fund will finance a project by way of a forward fund structure, the investment fund will enter into a Development Management Agreement with the developer client.

Finally, please note that the fund will not engage until a project has detailed planning permission.

Singapore Private Equity Fund

Wed, 15 Sep 2021 15:36:47 GMT

Singapore Private Equity Fund...

We are now working with a Singapore Private Equity Fund that is focused upon the following sectors:

- PBSA

- PRS

- Co Living

- Senior Living.

They are already investing in the U.K and currently operate PBSA projects in:

- Edinburgh (274 beds)

- Sheffield (284 beds)

- Nottingham (300 beds).

Their ideal project size is:

- PBSA 300 to 500 beds

- PRS 200 to 300 units.

They like to deploy capital early on in the project life-cycle and they are not averse to taking planning risk. Therefore their capital is involved at the following stages:

- Land Purchase

- Planning

- Build Out

- Retain for 2 to 3 years to stabilise the asset

- Sell On.

The fund will deploy their capital day 1 to purchase the land etc and then arrange senior debt for the construction funding.

They prefer to work with joint venture partners who are experienced developers or contractor/developers. They are looking to build relationships with new partners on the basis that several projects can be built out over the next 3 to 5 years. As already stated, the fund prefers to maximise the project yield by retaining the asset for 2 to 3 years during which time the asset will stabilise before selling on into the institutional market. If the fund's joint venture partner wishes to be bought out after 2 years e.g on project completion, then this is also possible.

In turning to the level of investment into a joint venture partnership, please note:

- For the first project with a new joint venture partner, the fund would want the partner to invest 25% of project costs as a minimum contribution.

- Once the relationship is established, the fund is happy to invest up to 90% of all costs and the joint venture partner invests only 10% of project costs.

With respect to return on capital, the fund is looking for an I.R.R of 18% over a 2 to 3 year period.

100% for developments (acquisition and build) up to a maximum facility of £4million GDC

Tue, 03 Aug 2021 16:56:34 GMT

100% for developments (acquisition and build) up to a maximum facility of £4million GDC...

This is an improved joint venture facility that previously had a maximum of £2.5 million.

It is a genuine partnership with priceless insider knowledge in construction as both a developer and lender. Our criteria are simple: A 27% minimum return on GDV (pre-finance), full or outline planning, middle of the market reasonably priced housing and a maximum term of 18 months.

• True 50/50 profit share - no fixed exit cost

• No valuations or personal guarantees

• No borrower cash input

• Fully funded acquisition and build

• UK Mainland

Joint Venture Equity for Experienced UK Residential Property Developers and Investors

Fri, 18 Jun 2021 16:38:35 GMT

Joint Venture Equity for Experienced UK Residential Property Developers and Investors...

We seek to work with the best in the class operating partners where our experience, as well as our capital, can add strategic value to long term partnerships.

• London (Zones 3 - 9)

• The South East

• Select UK Gateway Cities

• New build developments

• Development (PD and refurbishment) normally within HTB thresholds

• Investment, asset management plays, re-positioning and recapitalisation's

• Up to 98% LTC or 80% LGDV

• Typical investments of £500,000 - £10,000,000

• Equity invested upfront (subject to business plan)

• Residential development for open market sale

• Alternative sectors including Private Rented Sector (PRS), Build to Rent (BTR), student accommodation, hotel, co-living, retirement and mixed use schemes.

ACQUISITION BRIDGE

We look to support developers "on the way in". We can do this by providing short-term funding quickly - enabling developers to move swiftly to acquire the site.

Rates from 0.80% per month

Term - 6 to 12 months

Up to 80% LTP (Loan to Purchase Price)

Bridge can be converted to mezzanine position - "Bridge to Mezz".

Student Accommodation

Fri, 11 Jun 2021 14:25:15 GMT

Student Accommodation...

Our funding & finance partners are working with a fund that specialises in supporting student accommodation be it development or investment. The facility profile is as follows:

• Minimum loan - £10 million

• Maximum loan - £100+ million

• Maximum loan to cost - 85% (Development)

• Maximum loan to value - 75% (Development and investment)

• Interest rate - 8.0% to 8.5%

• Arrangement fees - 1.5%

• Exit fee - 1.5%

Insolvency and Turnaround Facilities

Fri, 28 May 2021 16:53:48 GMT

Insolvency and Turnaround Facilities...

Personal Insolvency (Regulated Facilities):

Bankruptcy Annulment

(i ) Second charge loan facilities secured upon a private residence with loan facilities from £25,000 to £150,000.

(ii ) First charge facilities secured upon a private residence from £25,000 to £2 million.

Discharge a Trustee in Bankruptcy

(i ) Second charge facilities as above.

(ii ) A residential mortgage or re-mortgage having been discharged just one day.

Discharge a Failed IVA or Vary an IVA

(i ) Second charge facilities as outlined above.

(ii ) First charge facilities as outlined above.

Please note funds can also be secured upon alternative assets such as buy to let properties or commercial assets.

Corporate Insolvency:

(i ) Secured Debt - It is possible to secure debt on a variety of assets both within the business balance sheet and the Principal's personal assets. Such facilities can range from £50,000 to £10 million.

(ii ) Sale and Leaseback - If a company has a building within the balance sheet, we have investors who will buy the property and rent it back to the company. The range is £500,000 to £25 million.

(iii) Unsecured Funding - There are many 12 months facilities which can be used to stabilise a company.

(iv) Equity - Where a business is in an insolvent position there are options for the business by way of an equity injection of capital. The range of capital is from £500,000 to £30 million.

Finally, our finance & funding partner is a member of R3 and the TMA and therefore has a true grasp of insolvency.

Special Opportunities Fund: Summary

Fri, 28 May 2021 16:47:47 GMT

Special Opportunities Fund: Summary...

• Funding levels up to £200 million

• Day 1 release minimum £20 million

• Facility spread over 3 to 4 years

• Type of funding - The whole capital stack of debt, mezzanine and equity

• Maximum loan to costs - 95%

• Developer input towards costs - 5%

Preferred Sectors:

- Social Housing

- P.R.S

- Build to Rent

- Student Accommodation

- Hotel Purchase and Refits

- Commercial to Residential

Facility is Ideal for:

- The hotelier wanting to expand the number of hotels in the portfolio

- The build to rent developer/investor who wishes to expand rapidly with minimum capital outlay

- The student accommodation investor who wishes to expand

- The developer who wishes to expand

Cost of Capital:

- 10% to 15% coupon plus an equity kicker to achieve an IRR of 20%

Special Opportunities Fund

Mon, 24 May 2021 13:58:52 GMT

Special Opportunities Fund...

Our funding & financing colleagues are working with a European Special Opportunities Fund. They have circa £3 billion of capital under management on behalf of pension funds, endowments, foundations and other institutional investors. They have offices throughout Western Europe and subsequently invest throughout Western Europe which includes the U.K and Southern Ireland. Real estate equates to 80% of their total investment funds and they need to deploy £1 billion during the next 18 to 24 months.

They prefer to provide the whole capital stack which, obviously, includes senior debt, mezzanine and equity. By providing the acquisition capital and development capital they attract a client's current projects and the client's pipeline of projects. In turn, this funder will offer a client up to £200 million as a funding line over the forthcoming 3 to 4 years thereby allowing the client to focus on projects as opposed to worrying about finance. The client needs to provide only 5% of the project costs.

The day 1 draw down has to be £20 million and subsequently the balance of the facility is drawn down thereafter.

Their preferred sectors are:

• Social Housing

• P.R.S

• Build to Rent

• Student Accommodation

• Hotel Purchase and Refits

• Commercial to Residential.

(They will not engage in planning risk at all)

Their cost of funds to the client are: 10% to 15% coupon plus an equity kicker to achieve an IRR of 20% which is very reasonable.

An example of a recent transaction is as follows:

A developer specialising in social housing which is pre-let to local authorities, received 95% of acquisition and development project costs thereby ensuring the developer input only 5% of project costs. The cost of the capital to the developer is 10% coupon + equity to reach an IRR of 20%. The funding line is £100 million over 3 years.

This facility is ideal for the following clients:

• The hotelier who wishes to expand the number of hotels in the portfolio.

• The build to rent developer/investor who wishes to expand rapidly with minimum capital input.

• The student accommodation developer/investor wishing to rapidly expand the number of beds within the portfolio.

• The developer who wishes to expand rapidly.

It should be noted that after the facility has been deployed the exit strategy for the funder and client will be either a sale to a third party institution or a refinance to discharge the funder by way of longer term and cheaper capital.

Second Charge Facility for the "Time Rich, Cash Poor"

Wed, 19 May 2021 15:27:25 GMT

Second Charge Facility...

My colleague has a second charge lender who will offer:

* up to £10million

* Term of 60 months

* Interest only

* 70% loan to value on residential

* 60% loan to value on commercial

* Based on 180 day valuation

* Interest rate of 8% to 13%

This facility is ideal for clients who are asset rich but cash poor and want to release capital for various purposes including the purchase of more property or the purchase of a business or to progress a development project

Equity Funding Update...

Wed, 19 May 2021 15:19:57 GMT

Equity Funding Update...

With reference to the above, the following facilities are available:

100% Joint Venture funding up to £7 million: This lender is based in Yorkshire. If the loan required is no more than £7 million, the project is within two hours drive of Sheffield and the project pre-finance profit is 29% of the gross development value, then this lender will provide 100% funding on a profit share basis.

100% Joint Venture Funding up to £2.5 million: If the project costs equate to no more than £2.5 million, even though the developer may have little or no experience of development this lender will provide 100% funding for the project. Please note that the profit before costs must be 29% of the gross development value.

90% of the Equity Required: This institution will sit behind a senior debt provider and advance up to 90% of the equity required on a profit share basis. The maximum advance is £1 million.

Private Investor Says "Developer Pays Only the Valuation and Legals": This investor will sit behind a senior debt provider and provide the equity shortfall. The sweet spots are between £250,000 and £1 million for a maximum term of 24 months. In return, the investor requires to "double my money" i.e. invest £750,000 the investor needs £750,000 profit.

98% Loan to Costs: This investor will sit behind a deposit taking senior debt provider and provide sufficient funds to cover up to 98% of the total project costs. The maximum advance by the investor is £2 million.

The South and South East: This private investor will sit behind a senior debt provider and invest sufficient funds to cover the equity shortfall. The investor requires a profit share of 50%. The maximum investment is £2 million.

A Proactive Family Office: Will sit behind a senior debt provider and provide up to £2 million to ensure that the developer has 100% funding to progress a project. The family office requires 50% of the project profits.

Institutional Funding up to £7 million: This institution will provide up to £7 million in equity funding to sit behind a senior debt provider and ensure the developer has 100% funding. This lender will take a profit share but not necessarily 50%. Finally, if the project is build to rent, this lender can consider buying the completed project for their portfolio.

Big Deals don't Frighten us: This institution will provide 80% of the equity required. For example: A project has total costs of £25 million. A senior debt provider advances £20 million. Therefore, there is an equity shortfall of £5 million. In turn, if the developer can input £1 million, this institution will provide the £4 million on the basis that the institution will charge a coupon of 20% and 50% of the project profits.

Freeport Initiative

Wed, 19 May 2021 14:15:19 GMT

Freeport Initiative...

Following the recent announcement by the Government that various locations throughout the UK will be designated as Freeports, my colleagues has engaged with his investors and investment houses to create bespoke funding packages that are appropriate to the Freeport initiative.

If a developer is able to pre let an industrial building, warehouse etc, our investors will forward fund the project.

This means that our investors will:

• Buy the land

• Enter into a development agreement with the developer

• Pay on a drawdown basis for the build out to be carried out

• Hold the investment for the long-term yield. (Typical yields of 5% to 6%)

• Developers input minimal if any capital.

If the project cannot be pre let, then we also have bespoke finance facilities for more speculative situations.

Funding For Northern European Commercial & Residential Property

Wed, 21 Apr 2021 14:22:08 GMT

Northern Europe Property Funding...

we now have access to the following funding facilities:

• Location - Northern Europe.

• Purposes - Purchase, Refinance, Develop, Reposition commercial property and residential development.

• Asset class - Flexible.

• Loan size - €10million to €300million.

• Maximum Advance - 85% Loan To Costs.

• Term - 36 months.

Update: Working Capital Facilities

Thu, 11 Mar 2021 12:38:51 GMT

This is a subtitle for your new post

With reference to the above, our funding partner continues to develop facilities which will be of interest to our professional contacts. In turn, I quote below details of two new facilities:

The first lender will offer as follows:

• Loans of £1million to £7.5million

• Loan Term: 1 to 5 years

• Interest Rate: 8% to 10%

• Fees: 2% to 4%

• Security: First ranking debenture

• Purpose of loan: Refinance, Acquisition, Management Buy Outs, Management Buy Ins and Working Capital.

This lender would appear to be willing to lend into your sector and covers the U.K including Northern Ireland.

The Second lender will offer as follows:

• Loans from £4million to £20million

• Loan Term: 5 years and interest only

• Interest Rate: LIBOR + 8%

• Fees: 4%

• Purpose of Loan: As per the first lender

• Criteria:

• Sector Agnostic

• Geographically Agnostic including Southern Ireland

• Minimum profit of £1million

• Minimum trading period of 12 months at £1million EBITDA.

Equity Finance Solutions for Property Developers

Thu, 11 Mar 2021 12:27:01 GMT

Equity Finance Solutions for Property Developers...

Source: High net worth individual

Loans: £500,000 to £2,500,000

Geography: England

Development Profile: Houses and Apartments

Unique Feature: 98% of interest costs

Profit Share: 50%

Preference: Senior debt with deposit taking bank

Source: High net worth individual and hedge fund owner

Loans: £300,000 to £3 million

Geography: U.K

Development Profile: Houses, Apartments, P.D Schemes (no commercial aspect in

the new project i.e.no LIDL etc)

Unique Feature: Flexible with senior debt, will provide all residual funding, can

consider Planning Gain opportunities.

Profit Share: 50%

Preference: If an equity JV opportunity then requires planning in place

Source: High net worth individual

Loans: £500,000 to £2 million

Geography: South East, South Coast and South West

Development Profile: Flexible

Unique Feature: Provides balance of funds behind the senior debt. May

consider delinquent sites

Profit Share: 50%

Preference: Planning in place

Source: Institutional

Loans: £1 million to £7 million

Geography: 2 hours drive of Sheffield

Development Profile: Houses within help to buy

Unique Feature: 100% funding of the project

Profit Share: 50%

Preference: Pre-finance profit on GDV of 29%

Source: Institutional

Loans: Maximum £2.5 million project costs

Geography: Primarily the midlands and north

Development Profile: Houses within help to buy

Unique Feature: 100% funding of the project

Profit Share: 50%

Preference: Sub contractors who wish to be developers

The Recent Budget: Mortgage Guarantee Scheme

Thu, 11 Mar 2021 12:22:33 GMT

Mortgage Guarantee Scheme...

This scheme has a tremendous benefit to our developer clients. For example, a client intended to sell circa 50 houses to an Affordable Housing Institutional Investor. The certainty of a sale at 80% of true value to a Housing Association was appealing. However, with the above Mortgage Guarantee Scheme now available, the developer client has decided to sell on the open market and achieve 95% of value instead of selling to the Institutional Investor at 80% of value. The subsequent increase in project profitability exceeds £1 million.

As you are aware, we, as an office, continually evolve to provide new development finance facilities for you to discuss with your professional associates. With this in mind, I can confirm that the following are now available:

• 100% loan to costs with profit share.

• 90% loan to costs with no profit share throughout the U.K.

• 90% loan to costs with no profit share and no personal guarantees in the south of England.

• Offshore funding in Gibraltar, Spain, The Canaries, The Channel Islands, Isle of Man and Southern Ireland.

• Larger project funding throughout Western Europe (unfortunately no equity investors).

I hope that the above is of interest to you and that you agree that there is no better time to be involved in development funding.

Recent Case Studies: Distress, Turnaround & Recovery

Wed, 03 Mar 2021 13:39:57 GMT

Recent Case Studies...

With reference to the above and various finance solutions for insolvency, during the pandemic, our financing partner has had opportunity to assist in the following circumstances:

A farmer who was struggling financially, was made bankrupt by HMRC . The accounts were not impressive. However, this office arranged funds secured upon the land etc to annul the bankruptcy.

Mother and son were both made bankrupt following a failed business venture. Again this office was able to arrange funding to annul the bankruptcy.

A self employed builder had endured a painful divorce. During this period, he became in breach of his IVA which subsequently failed. As a consequence HMRC issued bankruptcy proceedings against him. Thankfully, this office quickly arranged an agreement in principle for the client to show to the Court and achieve an adjournment to allow the funds to be put in place.

A company liquidated. A sister company owed the liquidated company £250,000 but did not have the reserves to pay over to the liquidator. The Principal of both companies lives in a house which is owned by a Trust set up for the benefit of the grandchildren. Despite these issues this office was able to assist.

A company was "stressed" and had a freehold property. Unfortunately, because the company was struggling financially, a sale and lease back was not viable. Therefore, this office introduced a third party investor who input capital to stabilise the position. Thereafter, planning permission was obtained to convert the commercial property into residential. Subsequently all parties were able to show a good profit.

Precision engineer in financial difficulties due to Covid 19 received an injection of capital in return for share capital.

A stressed haulage company with HMRC debt was heading towards insolvency. Thankfully, the client had a high asset value of warehousing. Consequently this office arranged a sale and leaseback for £8million.

Mezzanine Funding

Tue, 16 Feb 2021 17:44:43 GMT

Mezzanine Funding...

Our funding & finance partner has worked with this funder for many years and considers their offerings to be quite flexible:

"We have been providing mezzanine funding to developers for over 15 years and we cover most of the country, from the south coast to Edinburgh. The banks we like to work with include Close Brothers, Paragon, Aldermore, Hampshire Trust, Secure Trust, United Trust Bank, Commercial Acceptances. We are in discussions with a couple of other lenders regarding Deeds of Priority.

We fund projects with planning consent but in certain situations we will lend where the developer seeks to improve the planning consent, so long as this is achievable in a reasonable time frame. Over and above the bank, we lend up to 90% of costs.

Indicative terms - 1

Over and above the bank, we lend £250,000 up to (in normal times) £2,000,000 per project.

The developer puts in 10% of project costs.

As we lend our own money we use simple interest rather than compounded, but as most lenders use compounded the following is at the equivalent compound rate over a typical 18 month project, 12 months build, 6 months sell, so you can more easily compare like for like.

Arrangement fee 1.5% (we add your fee, deduct it from our loan and pay you direct).

Interest 3% per annum

Exit fee 13% per annum on the loan amount

The interest of 3% per annum is paid by the developer each month. So a mezzanine loan of say £500,000, at 3% per annum equates to monthly payments of £1,250. In other words the developer services the 3% per annum interest. By doing it this way the developer gets more on day one. It’s the opposite of a bridging loan, where they take all the interest off the loan on day one.

The exit fee is 13% per annum based on the loan amount and is paid, after the bank, from the sales of the residential units. Or a refinance if the developer wants to keep them.

Indicative terms - 2

In addition to the above we are now providing mezzanine funding for smaller projects. Typically small builds and refurbishment projects where the length of the construction work is about 6 to 9 months. For these projects we can provide mezzanine loans from £75,000 to just under £250,000. These smaller and shorter mezzanine loans are at 22.5% per annum as expressed at the equivalent compound rate.

Arrangement fee 1.5% (we add your fee, deduct it from our loan and pay you direct).

Interest 5% per annum

Exit fee 17.5% per annum on the loan amount."

Bridging facilities

Tue, 09 Feb 2021 14:22:48 GMT

Bridging facilities...

We have access to a lender who can offer both 1st and 2nd charge facilities up to 75% loan to value for the following purposes:

Bridging - £10million

Land acquisition - £2million

Auction finance - £2million

Commercial property - £2million

Buy to let finance - £2million

Litigation finance - £2million

The interest rate (at time of writing) is 0.95% per month on a t erm of 364 days, u nregulated.

"One Stop Shop" For Property Development

Thu, 21 Jan 2021 15:27:38 GMT

One Stop Support For Developers...

We are all hoping that 2021 is the year of recovery. An economic recovery can often be driven by building houses. With this in mind, we have put together a team of professionals who can take a developer from "cradle to grave". The support on offer is:

Planning Stage:

• Planning Consultants

• Abortive Planning Costs Insurance

• Architects

• Barristers specialising in Planning Appeal

• A Support Team to provide all the necessary reports.

Planning Granted:

• Building Solutions

• Estate Agents

• Finance - Debt, Mezzanine, Equity.

Construction:

• Ongoing interaction with funders.

You Overrun Your Term:

• Exit and Finish Finance.

You Find Another Site But Have No Monies:

• We find a Joint Venture Partner to fund you.

You Sell All The Houses Or Apartments And Pay Back Everyone:

• We can help you celebrate the profit!

An Update on Winding Up Petitions & Liquidations

Thu, 21 Jan 2021 15:11:00 GMT

"Carnage" Predicted For Q3 2021...

I recently received an update from our financial broking partner. He had spoken with a highly respected professional who is involved in the insolvency world. He was told that:

• There are 80,000 Winding Up Petitions to be presented to the Court on or after April 1st , once the moratorium is lifted.

• That on average, there are 15,000 to 20,000 insolvencies per annum. However, in the next 18 months there will be an expected 500,000 insolvencies !

• In Q3 of 2021 "there will be carnage".

Our partner and his colleagues have over 20 years experience of funding restructuring and turning around of businesses. If you, or your clients, don't want to be a statistic within the carnage of Q3 2021, please contact us today!

Latest Case Studies

Thu, 21 Jan 2021 14:54:48 GMT

Latest Case Studies...

• A farmer who was struggling financially, was made bankrupt by HMRC . The accounts were not impressive. However, this office arranged funds secured upon the land etc to annul the bankruptcy.

• Mother and son were both made bankrupt following a failed business venture . Again this office was able to arrange funding to annul the bankruptcy.

• A self employed builder had endured a painful divorce . During this period, he became in breach of his IVA which subsequently failed. As a consequence HMRC issued bankruptcy proceedings against him. Thankfully, this office quickly arranged an agreement in principle for the client to show to the Court and achieve an adjournment to allow the funds to be put in place.

• A company liquidated . A sister company owed the liquidated company £250,000 but did not have the reserves to pay over to the liquidator. The Principal of both companies lives in a house which is owned by a Trust set up for the benefit of the grandchildren. Despite these issues this office was able to assist.

• A company was "stressed" and had a freehold property . Unfortunately, because the company was struggling financially, a sale and lease back was not viable. Therefore, this office introduced a third party investor who input capital to stabilise the position. Thereafter, planning permission was obtained to convert the commercial property into residential. Subsequently all parties were able to show a good profit.

• Precision engineer in financial difficulties due to Covid 19 received an injection of capital in return for share capital.

• A stressed haulage company with HMRC debt was heading towards insolvency . Thankfully, the client had a high asset value of warehousing. Consequently this office arranged a sale and leaseback for £8million.

Funding Update on PRS, Social Housing, Warehouses & Hotels

Tue, 12 Jan 2021 13:55:14 GMT

Funding Update...

Value added: We have 4 separate funds who like to invest early to enjoy the planning gain profit as well as the development profit. They like:

• Commercial to PRS or houses

• Warehouses

• Social Housing.

The range of funding levels is £2million to £100million.

Warehouses:

• We have 4 funds who will forward fund on a pre let basis.

• We also have funds who will invest on a speculative and JV basis.

Hotels: We have a fund specialising in the purchase or equity position of hotels up to £500million.

Forward Funding: We have many funds who will provide such a facility for:

• PBSA

• PRS

• Social Housing

• Supported Living

• Retirement villages.

Commercial Property Repositioning: An Early Stage Fund (£2m-£100m)

Thu, 07 Jan 2021 11:32:32 GMT

Commercial Property Repositioning

This facility is ideal for office blocks, nursing homes, hotels etc. The product could be considered as a restructuring or stressed facility for the current owner or an opportunistic investor.

Example 1:

An office block purchase price £4 million with short lease commercial tenants generating £350,000 in rental income.

Request:

Funding to allow a client to purchase the target property. Once purchased, the client will apply for planning permission to reposition the office block as 77 PRS units. With the planning gain the client will enjoy a profit of £2 million. If the PRS scheme is built out, the client will enjoy a profit of £4 million.

Solution:

A specialist debt provider will advance 75% of the purchase price with no profit share. Alternatively, two independent joint venture or equity provider will fund the majority of the purchase price in return for 50% of the profit.

Example 2:

Opportunities to obtain planning permission to build out one of the following:

• Residential Housing Scheme

• Build to Rent Scheme

• Warehouses/Logistics.

Solution:

A specialist fund which likes to invest at an early stage will deploy between £2 million and £100 million as equity participation or mezzanine finance.

Light Development Loan

Mon, 30 Nov 2020 15:13:21 GMT

Light Development Loan: interest rate from 0.74% pcm

Key Product Criteria:

Loan Size: £200,000 to £3,000,000

Max. Gross LTV (day one): 75% (gross loan amount divided by the lower of purchase price and valuation. Higher LTVs are available with additional security on a first charge basis only.)

Max. Gross LTGDV: 70%

Loan Term: 3 to 24 months

Min. Developer Profit: 15% profit on cost for experienced borrowers (minimum of 3 previously completed development/refurbishment projects in the past 3 years.) 20% profit on cost for new borrowers.

Developer Experience: Limited experience considered.

Planning Permission/PDR consent: Beneficial.

Product Rates & Fees:

Interest Rate (per month): From 0.74%

Arrangement Fee: 2%

Procuration Fee: From 1.5%

Valuation and Monitoring Fees: At market rate, provided upon application and to be paid up front.

Legal Fees: At market rate, provided upon application. To be deducted from the loan amount. The borrower’s lawyer will be required to provide the lender’s lawyer with an upfront undertaking to pay any legal fees in full.

Exit Fees: None

Early Repayment Charge: None

Product Characteristics:

Residential and Commercial Properties in England & Wales Only

UK Residents and Limited Companies Only

Adverse Credit History Accepted

Permitted Uses:

PDR Schemes

Heavy Property Refurbishment & Extension

Property Conversions to Residential & HMO

Finish & Exit

Prohibited Uses:

Ground Up Developments

Properties with Adverse Environmental Conditions

Owner Occupier Properties

Agricultural Properties

Industrial & Logistics Real Estate Funding

Mon, 30 Nov 2020 14:23:58 GMT

Two Options for Funding Industrial & Logistics Real Estate...

Option 1 – Pre-let, non-speculative:

Our clients are investment funds seeking Distribution Warehouses, Logistics and Manufacturing plus associated on-site offices in mainland UK to purchase new builds with yields of around 6%, pre-let, subject to the strength of the tenant's covenant.

The funds can deploy between £8m to £25m per project investment.

The funds themselves have the potential capital available of £500m.

The clients will either “forward commit” or “forward fund” and give the Developer a target price along with entering into a development agreement which includes their profit for the project.

Option 2 – speculative (no Pre-lets):

Our client is an investment fund that will provide equity funding. The profile of their offering is as follows:

• All sectors considered apart from, at present, hospitality unless converting the hospitality venue to other uses.

• Minimum cash input by them is £2m and maximum is circa £20m.

• The fund will input 90% of the equity required, so for example if the project costs £15m, and the senior debt is £10m, there is an equity shortfall of £5m which will be covered by way of £4.5m (90%) from the fund and only £0.5m (10%) from the Developer.

• The fund likes projects with profits of approximately 30% return on project costs.

• A joint venture would be set up with the developer with 50/50 voting rights.

• The developer would be paid a development management fee.

• The developer would be paid an asset management fee.

• The developer would receive 40% of the project profits subject to the final project IRR.

• The fund will take planning risk.

• The fund will consider distressed situations.

Speculative Development Equity Funding…

Tue, 10 Nov 2020 13:12:39 GMT

Speculative Development Equity Funding…

We have access to an investment fund that will provide equity funding. The profile of their offering is as follows:

All sectors considered apart from, at the time of writing, hospitality unless converting the hospitality venue to other uses. The fund will take planning risk and consider distressed situations.

The fund will input 90% of the equity required, with a minimum cash input of £2 million and maximum of circa £20 million.

F or example: A project costs £15 million, senior debt of £10 million, shortfall of £5 million which will be covered by way of £4.5 million from the fund and only £500,000 from the client/developer.

The fund looks for projects with profits of approximately 30% on project costs.

A joint venture would be set up with the developer with 50/50 voting rights.

The developer would be paid a development management fee as well as an asset management fee.

The developer would receive 40% of the project profits subject to the final project IRR.

Long-Term Investment Fund: Mainland UK Industrial & Logistics New Builds

Mon, 09 Nov 2020 15:48:51 GMT

A long-term investment fund which invests in Mainland UK based industrial and logistic new builds...

We have access to a long-term investment fund which invests in Mainland UK based industrial and logistic new builds subject to the strength of the tenant's covenant. This fund can deploy between £8 million to £25 million per project investment. The fund itself has the potential capital available of £500 million.

The investment strategy is “build and hold” income generating, focusing on sale & leaseback, single tenant net leased properties and a secondary focus on “build to suit” leasebacks with forward commitment to lease. The target lease term is 5+ years, with shorter terms considered subject to real estate quality and rent vs. ERV. The target overall WALT is 10+ years.

A smaller independent investment fund will deploy between £1.5 million and £6 million to purchase appropriate land suitable for the build-out of industrial or logistic properties. This fund enters into a joint venture with a developer, whereby the developer arranges suitable tenants for the new build properties. This joint venture arrangement is on a profit share basis whereby the investment fund charges a coupon of 7% and a project profit share of 25%.

The developer does not have to input any capital but benefits from 75% of the project profit.

The senior debt development funding is arranged independently to ensure that the industrial logistics are built out for the above long-term investment fund to own.

Development Funding for Small Industrial Sites & Care Homes

Thu, 15 Oct 2020 10:27:49 GMT

A specialist investment fund looking for small industrial sites & care homes to invest in...

We have a long and successful working relationship with the Principal of a specialist investment fund, whose 'sweet spot' is to invest £4 million to £6 million. At present the sectors that they are involved with are as follows:

The development of small industrial sites: For example they have purchased the land upon which 470,000 square feet of industrial buildings will be built out.

Care Homes: They will help to fund the refurbishment or build out a care home where there is an exit in place.

Typically they will expect an interest rate of 7% and 25% of the subsequent profit.

Finally, they operate throughout the United Kingdom (including Scotland and Northern Ireland) and will also invest in the Republic of Ireland.

Equity Capital For Growth

Fri, 09 Oct 2020 17:22:05 GMT

Equity Capital For Growth...

Despite the current climate, there are many profitable businesses that are able and willing to grow rapidly if only they have the necessary capital. With this in mind, we are working with equity funds who will invest from £10 million to £100 million. In turn, please see their comments and criteria concerning when they will invest.

1. We provide growth capital to businesses that typically have got their winning formula and

need capital to roll it out.

2. We back management teams

3. We back an MBO if there has been some clean air between the owners & management

team.

4. We invest on what we perceive the business to be currently worth and provide the capital

to hopefully grow it exponentially.

5. Our investee companies get almost limitless funds to expand their business quickly and

without capital constraints.

Distressed Situations: Media, Precision Engineering & Manufacturers of High Quality Goods

Thu, 08 Oct 2020 16:56:05 GMT

Buyout solutions for niche sectors...

Due to Covid, Brexit and other issues, certain trading companies will begin to feel stress and distress as a business. Furthermore, the Principal owners may have had enough and want to retire. Such Principals may have built their business in the 1990s and now wish to realise some value in it.

With the above in mind, we have various specialist funds who can assist. As an example, a fund known to this office invests from £100,000 to £90 million in a trading business that is distressed, stressed or where the Principal wishes to retire. This particular fund prefers to take control of the target company. Subsequently, they will provide both debt and equity capital along with management expertise. Their preferred sectors are:

• Media and television

• Precision and specialist engineering

• Manufacturing of high quality goods.

The above is just one of the many distressed funds that we have access to. In having access to a wide variety of funds, we are able to help trading businesses experiencing a wide variety of challenges.

Exit strategies: a guarantee for Developers

Thu, 08 Oct 2020 14:01:48 GMT

Exit strategies for Developers

"As we continue to be innovative and entrepreneurial for our Developers, I would like to share with you a product we have recently researched offering a guaranteed exit strategy. In the past few months, lenders have become increasingly concerned about pre-sales and exist strategies and have asked for 30% or more before the finance is granted. This product allows a Developer to proceed much faster with the finance and then subsequently starting the project.

The opportunity is for developing schemes or phases of 15-60 units with a typical GDV of £3m to £20m.

The guarantee removes pricing and demand risk, opening up access to finance on improved terms and with increased leverage. As part of the guarantee, the provider will pay over a 10% cash deposit which can be released to the developer pre-construction. These funds can have a transformative effect on viability, reducing equity requirements and boosting developer returns.

The guarantee removes all speculative risk completely changing the credit profile.

So how does it work?

1. An interested party will generate an instant underwrite through the product providers online engine. This proposal will detail the sales guarantee as well as demonstrating expected improvements in returns and reductions in equity input.

2. A surveyor will engage with the developer, their lenders and advisors to review the full details and instruct lawyers

3. The provider will exchange contracts, pre-construction, guaranteeing to acquire all units on a site at a set price. They will pay over 10% of the contract price as a deposit which can be released to the developer or their lenders for their use.

4. The developer will commence construction and open market sales. For each unit sold on the open market the provider will take a small underwrite fee for providing the sales guarantee.

5. If there are unsold units at the end of the development cycle, or at any point in the process, the developer or lender can call upon the provider to complete on the remaining sales.

A working example:

A typical benefit enjoyed on say a £10m GDV scheme using the sales guarantee versus speculative approach:

• 78% reduction in upfront developer cash contribution

• 186% increase in developer returns on cash invested

• 10% deposit released to the developer on exchange

• 91% Loan To Cost

• Improved viability allows for stronger offers on new sites without losing margin

• Guaranteed sales, pricing and exit

• Develop more stock and more sites

• Quicker, cheaper and easier financing with a sales guarantee

• Reduce/remove personal liabilities

• The 10% deposit plugs a developers equity shortfall

• Complete visibility and control over sales and outcomes

• Reduce cash requirement

• The use of sales guarantee allows developers additional leverage so larger or multiple sites can be targeted

• Quick and simple to get a sales guarantee proposal

If you would like further information then we would be delighted to detail how this might work for your own projects."

Housing Scheme

Tue, 06 Oct 2020 12:44:58 GMT

Housing Scheme...

Approximately by how much would the GDV be discounted?

We discount 20% below the agreed GDV. This will be agreed between both parties.

Would the whole project be underwritten or would the underwriter insist on a phasing programme to limit their exposure?

We will provide an underwrite for schemes between 15-60 units. We can go below this level but it would be site

specific and is likely to be marginally below say 13 or 14 units. It is unlikely a developer will construct more than 60

units in a first phase. We would agree to underwrite the whole 1st phase which is typically a two - three-year build

programme. Anything longer than this the GDVs are likely to change or become harder to predict.

If the site is larger than 60 units or has a second phase, we will request the 2nd phase cannot commence without our consent. It maybe we then underwrite the 2nd phase or the developer no longer needs us. We would not agree to provide an underwrite on a scheme if different phases are competing with one another or if we were only underwriting part of the first phase.

What percentage of GDV is advanced as a deposit?

We will release the deposit monies to the developer provided the warranty provider is either, NHBC, Checkmate or

ICW. The deposit monies are calculated at 10% of the underwrite figure. For example, if a scheme had a GDV of

£10,000,000. We would provide an underwrite of £8,000,000. Therefore, we would pay a deposit of £800,000

which could then be released to the developer provided the warranty provider is either NHBC, Checkmate or

ICW. We can still provide the underwrite if you use other warranty providers, we would just not be able to release

the deposit monies.

Can these deposit funds be used by the developer towards land purchase?

In order for us to exchange contracts on the underwrite, the developer would need to own the site, have full

planning permission including a completed S106 agreement and have the funding in place. In theory, if everything

was done simultaneously this could be possible but it would depend on the funding position. We would also want

to ensure the developer has a stake in the development and their own cash invested. Otherwise they may not be

fully incentivised to complete the development, which would leave us at risk and would question the motivations

for the developer and their commitment to see it through properly.

Are contracts exchanged?

We will exchange contracts to underwrite the whole site or the first phase. We can then be called upon to

complete on the purchases at any point during the contract. If a lender had to step in, this contract will still be

valid and we would still have to complete on the units if the lender called upon us to complete.

Are there any set up fees?

No, each party are responsible for their own costs, which will typically be each parties’ individual legal costs. There

are no other set up costs involved with the underwrite.

Will the underwriter have a charge on the land or take any other security?

We don’t take a charge we just register the purchase contract against the title which doesn’t interfere with

finance.

Can the developer sell the properties on the open market?

Yes this is the key to our unique underwrite proposal. We are there if you need to call on us to complete. We

actively encourage the developer to market the properties at the agreed GDV levels. They could even try and sell

above this level. If they complete a sale above the agreed GDVs then the developer will benefit from this, as we

only charge fees based on the agreed GDVs. If they do better than they will benefit from the upside not us.

If the developer sells a house in the normal way,

How does the house be separated from the underwriting process and what fees have to be paid to the underwriter to release the house?

If the developer sells to a third party, the property is then released from the contract. Although the contract on

the remaining properties will remain in place. For each unit you sell on the open market we will take a fee based

on the agreed GDV. The fee bands are 7%, 5.5% and 3.5%. The fees are retroactive so which ever band you end up

in (7/5.5/3.5) is the cost so if you sell out, as expected, it will only cost 3.5%

Can the developer refinance to discharge the underwrite?

For example, if the developer wanted to keep some properties as an investment. The developer could in theory acquire the units off himself, however the underwrite fees will still apply and they would have to acquire at a value in excess of our underwrite figure.

If the project has a last few units yet to sell, what is the procedure to invoke the underwrite agreement?

The developer can call on us to complete at any point during the construction period and after an agreed period of

time post practical completion. There is a long stop date often 6 months post practical completion but this can be

agreed at the negotiation stage. The developer will serve notice to complete, the timescales will be agreed

within the contract. If we are called upon to complete and the units aren’t yet finished, we will complete upon

practical completion of the units.

How long does it take to get a decision?

We can provide you with an instant initial underwrite proposal using our engine which is available on a website.

Alternatively, please send over the relevant information, such as site address, unit numbers, sizes and proposed

GDVs and we can provide an initial proposal within 24 hours.

Provided the initial proposal is acceptable. We can move to undertaking further due diligence which can be completed within a few weeks. Heads of terms can be drawn up and agreed and solicitors instructed. On the assumption all the legal information is available, the legals can take 4-6 weeks or as quickly as the solicitors can progress matters, although timescales will be agreed at the heads of terms stage.

Provided both parties are in agreement, the developer has full ownership of the site, has full planning consent included a completed S106 agreement and funding in place, we can then exchange contracts.

How long does it take to set up the facility?

As per the above

Next Generation Development Finance

Tue, 06 Oct 2020 12:27:25 GMT

A unique offering which guarantees sales for developers and their lenders

"The guarantee removes pricing and demand risk, opening up access to finance on improved terms and

with increased leverage. As part of our guarantee, we will pay over a 10% cash deposit which can be

released to the developer pre-construction. These funds can have a transformative effect on viability,

reducing equity requirements and boosting developer returns.

For development finance lenders and brokers our sales guarantee removes all speculative risk

completely changing the credit profile. This in turn allows more business to be written, at greater ease

and with increased certainty of outcome due to the sales guarantee.

“Everything should be made as simple as possible, but not simpler”

This quote is attributed to many great thinkers, notably Einstein, whilst there may be debate around

who said it there is no debate around the statement itself. We understand that development and

financing is already a complex area with many moving parts and a range of uncertainties. Our sales

guarantee cuts through many of these simplifying the process for all involved.

So how does it work?

1. An interested party – typically a developer, lender or finance broker – will generate an instant

underwrite through our online engine. This proposal will detail the sales guarantee as well as

demonstrating expected improvements in returns and reductions in equity input.

2. A surveyor will engage with the developer, their lenders and advisors to review the full

details and instruct lawyers.

3. Exchange contracts pre-construction guaranteeing to acquire all units on a site at a set

price. We will pay over 10% of the contract price as a deposit which can be released to the

developer or their lenders for their use.

4. The developer will commence construction and open market sales. For each unit sold on the

open market a small underwrite fee will be taken for providing the sales guarantee.

5. If there are unsold units at the end of the development cycle, or at any point in the process, the

developer or lender can call upon to complete.

DEVELOPERS

We generally work with SME developers across England & Wales, from start-up developers

establishing themselves in the market to more experienced regional housebuilders and construction

companies.

All of our clients are developing schemes or phases of 15-60 units with a typical GDV of £3,000,000 –

£20,000,000.

The Benefits of Next Generation Development Finance to Developers

• Typical benefits enjoyed on a £10,000,000 GDV scheme using our sales guarantee versus

speculative approach:

o 78% reduction in upfront developer cash contribution

o 186% increase in developer returns on cash invested

o 10% deposit released to developer on exchange

o 91% Loan To Cost

• Improved viability allows for stronger offers on new sites without losing margin

• Guaranteed sales, pricing and exit

• Develop more stock and more sites

• Quicker, cheaper and easier financing with a sales guarantee

• Access our wide network of trusted specialists and preferential terms (lenders, brokers,

specialist lawyers, tax advisors, warranty providers, planners, construction companies)

• Access new development opportunities via the network

• Reduce/remove personal liabilities

• The 10% deposit plugs your equity shortfall

• Complete visibility and control over sales and outcomes

• Reduce cash requiremen t

• The use of sales guarantee allows developers additional leverage so larger or multiple sites can

be targeted

• Quick and simple to get a sales guarantee proposal"

Social Rent/Forward Funding

Tue, 06 Oct 2020 12:00:31 GMT

Social Rent/Forward Funding

If a developer finds a piece of land which is suitable for a social rent project, a long term institutional investor will (subject to the yield being 6% and the project price exceeding £10 million), purchase the land, enter into a development agreement with the developer and pay for the build out of the project. Therefore, the developer has no capital outlay, no concerns about funding and no concerns about selling the units.

Due to the forward funding nature of this scheme the developer will make a lower profit margin of circa 8% to 12% of project costs. Finally, if the developer has insufficient experience or credibility to assure the financial institution that the project is deliverable, this office can provide a construction company as a joint venture partner to satisfy the concerns of the financial institution.

Supported Living Accommodation Development Funding

Tue, 06 Oct 2020 11:54:31 GMT

Supported Living...

This is where an individual, with learning difficulties or autism for example, rents a self contained apartment in a small complex with a carer on site. Examples of this could be a small commercial property such as a former Public House may be converted into 9 self contained apartments with communal areas for socialising.

In such circumstances it may be possible for a long term institutional investor to fund the purchase of the commercial property and the build out. This means the developer has no capital outlet. The profit margin to the developer is not as high as it would be for a speculative build out project but of course by forward funding the supported living project there is no risk at all to the developer.

Senior Debt, Mezzanine, 98% Scheme, 100% Funding

Tue, 06 Oct 2020 11:45:52 GMT

Property Development Funding: Senior Debt, Mezzanine, 98% Scheme, 100% Funding...

Senior Debt: We are able to arrange senior debt up to 70% LTGDV

Mezzanine Finance: We are able to arrange up to 95% of project costs.

98% Scheme: We arrange senior debt up to 65% LTGDV and a private investor will sit behind the senior debt provider as a second charge providing up to 98% of project costs. The investor will charge 14% per annum on the investment and take 40% of the project profit. The interest is rolled up into the 40% profit share resulting in approximately 50% of the project profit. If the developer brings the scheme in with a higher GDV or lower costs thereby making extra profit this extra profit will go to the developer.

100% Funding: If the project is in a location where the property market is moving quickly and the project costs approximate to £2 million, it is possible to obtain 100% of project costs on a 50/50 profit share basis. This facility is available to first time developers such as a subcontractor wishing to become the main developer.

Investment House will forward fund smaller P.R.S. schemes

Tue, 06 Oct 2020 10:46:35 GMT

We're working with an Investment House who will forward fund PRS schemes...

This investment house is very interesting for the smaller P.R.S Schemes and will forward fund. The criteria is very specific and helpful...

"We tend to work across all of the major cities in the UK where we have a population of circa 200k +. What drives our evaluation is the granular location and proximity to the centre. Where the value of the investment is higher than the sales market this causes some problems and so from a numbers point we wouldn’t invest.

We like to be first movers rather than coming in at the tail end.

Our schemes must have outside space, usually quadrangle areas of landscaping and paving.

Focus on 1 and 2 beds primarily with a mix of other units. A small programme of houses.

May consider existing stock as long as it’s off market.

Newbuild:

Our price point for our customers is circa £800 to £900 for 1 bed and £1,000 to £1,400 for 2 bed. Size of units no less 425 sqft and 2 beds no less 575 sqft. The majority of the 2 beds in a scheme should be 2 bedroom, 2 bathroom including en-suite. Lot size no less than 100 and if it’s 100 in a new area it will need to be considered in light of other local opportunities.

We forward fund with and without a coupon and we can forward commit albeit we like to control the quality of the product and the problem FC is that it’s almost turnkey. In forward fund we may want to specify a contractor from our framework which helps us to get the debt in place quickly. We fund our projects with equity and the the debt piece follows."

Equity Investment

Mon, 10 Aug 2020 14:48:23 GMT

Equity Investment in Property Developments & Trading Businesses...

We are able to arrange equity investment to cover the funding shortfall for residential and commercial development projects on a profit share basis.

In addition to this, I can confirm that we have broadened our product offering even further by engaging with a national network of High Net Worth Individuals, who wish to invest in Trading Businesses.

Such trading businesses should have the potential to grow to a fair size. The level of investment is negotiable, as is the level of shareholding. The Investor will wish to be a passive Investor, although the Investor will be supportive by bringing additional skills set top the business. The Investor will not have any preference as a shareholder because the investment will be by way of the EIS Scheme.

The Network with whom we are involved has a wide range of backgrounds, ranging from:

Digital

Restaurants

Manufacturing

Property

Professional services etc

The individual Investors are basically people who have built a business, sold out and require a return on their money, but also an interest in a business.

Some More Case Studies

Wed, 05 Aug 2020 15:01:09 GMT

Some more case studies...

Property Purchase: A client wished to buy an apartment in Mayfair for £1.2 million. The property had been valued at £1.4 million and was owned by a limited company. My client had only £200,000 cash as an input to the transaction.

Solution: the client was advised to buy the share capital of the vendor company to reduce the Stamp Duty liability. This also assisted the tax liability of the vendor. Thereafter, I arranged a long term finance facility of £1 million based upon the valuation as opposed to the purchase price.

A client is able to buy residential properties at a 30% discount to value because of a variety of distressed situations. He buys and sells 15 houses per week. His private funder charged 7% annual interest on the monies as well as a 25% share of the profits.

Solution: Our Finance contact arranged a facility of £4 million to discharge the private lender and provide an additional £2 million for working capital. The lender charges only 9% interest on the finance and no profit share.

100% Property Development Finance: A client found an opportunity to build out 8 apartments in Surrey to achieve a profit of circa £1 million. Unfortunately she had no available cash to input into the project.

Solution: A high net worth individual provided the equity required (cash input of £400,000) in return for 50% of the profit i.e. a return of 125% on the investment. This office also arranged the debt finance.

100% Property Finance with no Profit Share: A developer client was involved in two projects and had all his working capital tied up. He came to my office with a new proposal requiring £1.3 million to build out 8 houses and 6 apartments. He confirmed that he had no available cash.

Solution: Our finance contact demonstrated to a specialist lender that the client had built out during his career more than 40 units. Because of the client's experience and the potential profit of the project, this office arranged the full requirement of £1.3 million (with no profit share) to build out.

Social Housing: A client was invited by a local authority to tender to build out 2000 houses for the Council. He won the tender but could not fund the project.

Solution: Our finance contact brokered a joint venture with an overseas construction company who is funding the build out. Finally, an insurance company will be the ultimate owner on a 2.7% yield.

Director with Personal Guarantees: A former Director of a failed company had personally guaranteed £600,000 worth of unsecured creditors for the company. The client faced bankruptcy.

Solution: Our finance contact arranged the funding and worked with an Insolvency Practitioner to organise a single premium IVA for £150,000. The creditors accepted and the client was overjoyed.

Update on Distressed Situations Funding

Wed, 05 Aug 2020 13:24:39 GMT

An update on funding solutions for distressed situations...

During the 2008 banking crisis, our funding contact worked closely with the "special measures" departments of HSBC, NatWest, RBS and Yorkshire Banks. He recalls vividly that businesses and individuals did get into financial difficulties in 2008 but it was in 2009 and 2010 (some 18 months on) that I witnessed a tsunami of casualties. These were the businesses that had hung on for grim death but when they visited their bank for funding, because of the recent financial performance, no support was forthcoming and financial collapse was the result. Despite the government's initiatives, unfortunately there will be businesses collapsing principally because of a lack of capital. In anticipation of such events occurring this office has created the following facilities:

A Regulated Short Term Funder: This short term fund is ideal to help to annul or reverse a personal bankruptcy or vary an Individual Voluntary Arrangement.

Flexible Secured Funding: Funders who will provide funding secured upon personal and business assets be it first or second charge to enable financial restructuring.

Sale and Lease Back: Very often the fixed assets of a business have good value but are tying up working capital. In turn this office is able to arrange sale and lease back of such assets to stabilise a business.

Equity Funding: Many businesses that survive an economic crisis have financial difficulties as their order book begins to expand back to pre-crisis levels. The business has excellent prospects and the projections are encouraging. However, because of the recent economic crisis, the recent management information is insufficient to justify bank support. In such circumstances equity funding can be arranged from £100,000 to £20 million to support such businesses.

Assets of Business in "Transition": A global fund with whom we have access will, in certain circumstances, provide funding from £30 million to £250 million to stabilise the situation. What are these circumstances and when is an asset or business in transition?

• A development project that runs out of funding.

• An investment property where the tenant is not going to renew and will leave the property empty and the landlord in breach of banking covenants.

• A landlord without the working capital to carry out essential property refurbishments.

• An investor/landlord has a succession plan issue and has reached an age where he/she wants "out".

• An asset or a business which is over leveraged i.e. has too much debt on the balance sheet.

• An asset or business in breach of banking covenants. What type of securities would be eligible?

• Large apartment/student accommodation developments.

• Office block.

• Hotels.

• Nursing home group.

• Leisure parks. Our contacts within the global fund will step in, stabilise the situation, add value and then move on in 3 to 5 years.

Property Development Funding Update

Wed, 05 Aug 2020 13:19:06 GMT

An update on our approach to property development funding...

In addition to broadening the solutions available, we have tried to formulate a "cradle to grave" philosophy whereby we work with our developers from the planning application stage right through to providing a "purchaser" or "exit strategy" for the project.

Abortive Planning Permission Costs: This can be an extremely expensive exercise for developers. Frequently the cost of a planning application will deter a developer from progressing a project. In turn, we can now offer an insurance policy facility which will reimburse a developer the abortive costs of a planning application on the proviso that if initially declined the application goes to appeal.

The approximate cost of such a policy is 10% to 15% of the sum assured. Senior Debt Funding - We now work closely with a wide range of senior debt providers who can advance up to 70% of gross development value or 90% loan to costs. The types of development securities include residential developments, hotels, nursing homes and warehouses. We are able to arrange funding throughout the U.K and Southern Ireland. Mezzanine Funding - We liaise with many mezzanine funders who will support a project from 85% to 90% of project costs.

Mezzzanine/Equity Funding : We have an investor who will provide mezzanine finance behind senior debt to fund up to 98% of project costs. In return, the investor will require 50% of the project profits. The minimum loan is £500,000 and the maximum loan is circa £10 million. The types of securities are residential developments, hotels, warehouses and nursing homes. The investor will fund throughout the U.K and Southern Ireland. 100% Funding on a Joint Venture Basis - We have various contacts including family offices who will provide 100% of project costs on a profit share basis.

Assisted Living/Supported Living/Social Housing: This is a growing market. We have recently funded 125 units spread over 7 sites. The developer arranged a Housing Association to manage the units and a care provider to provide care support to the tenants/patients. This office also provided the long term owner of the project i.e. the exit strategy. Large Project Funding - We have the capabilities of arranging large project funding. Recently, we have been involved with the new build of a 370 key hotel and gym in London, 300 apartments in Birmingham, 1000 apartments in Leeds, 263 student accommodation project in Edinburgh and 125 units for assisted living in the north west.

Forward Funding: We are working with specialist investment funds that will forward fund large projects. These include hotel new builds, 300 PRS units, 1000 B.T.R apartments. The forward funder will acquire the asset to retain it in the longer term. The agreement typically works with an upfront land payment (at which point the land is transferred to the investor so that it can be charged to a lender that is funding the forward funder).

The development costs will be covered through monthly draw downs with a payment at PC of normally between 10- 15% of costs which represents the development profit. The forward funder takes over the asset at PC and all of the stabilisation risk. The developer takes responsibility of all costs of the development. Typically the forward funder will want to have an input in the choice of the contractor, the spec etc to ensure the building is delivered to their requirements.

The price the investor will pay for the development will be based on an investment appraisal as if the building was completed today. It depends on which part of the country and the residential team will be able to advise on the difference between the open market and the investment GDV. The benefit for the developer is that they don't have to raise finance and have a guaranteed exit and profit payment if they deliver the scheme on time and budget.

Exit Strategies: In the current climate, many lenders and investors have been reluctant to fund a project unless the exit strategy is clearly defined. With this in mind we have started to work with the following: Assisted and Supported Living Purchased by Real Estate Investment Trusts Social Housing Purchased by Pension Funds Student Accommodation Purchased by an Investment Fund Nursing Home Upgraded Purchased by a Real Estate Investment Trust Build to Rent Purchased by an Investment Fund. I hope that the above demonstrates our philosophy of "cradle to grave" support for our developers.

Corporate Finance Update

Wed, 05 Aug 2020 13:07:24 GMT

An update on Corporate Finance...

A strong well established business never stands still. There will usually be one of the following happening:

• Expansion

• Management Buy In

• Management Buy Out

• Purchase of another company

• Company Sale.

In support of such clients we are able to provide the following:

Share Purchase Insurance:

An insurance policy can be purchased whereby the sum assured protects the beneficiary of the policy in case of the warranties within the share purchase agreement are breached. The term of the policy is 6 years and the premium is 3% of the sum assured.

Funding Support:

• Unsecured funding, no Personal Guarantees and the advance is maximised at 2.5 times EBITDA

• Equity funding

• Government funding

• Sale and lease back

• Asset based lending such as invoice discounting etc.

Property Development Joint Venture

Wed, 05 Aug 2020 13:01:38 GMT

Joint Venture Case Study: Dunsmore Business Centre, Spring Street Rugby

Background: An existing borrower (JVP) to BIG Finance Limited agreed to purchase a closed down business centre for £650,000. They had obtained consent through Permitted Development Rights to convert to 22 studio and 1 bed apartments. JVP had experience with residential conversion albeit on a smaller scale but had a good design & professional team in place. At the point that the deal was submitted to BIG notice had been served on JVP to complete the purchase within 10 days.

Cost Summary Purchase Price - £650,000

Purchase Costs - £28,000

Refurbishment - £750,000

Sales & Marketing - £40,000

Interest @ 8% pa - £100,000

Total Exc. Interest - £1,568,000

Deal: JVP had circa £200,000 to put into the transaction so needed a facility of £1.35 million. This represented 88% of the total expected costs. Aitchison Rafferty provided a Valuation Report that supported the purchase price and costs and a gross development value of £2.2 million indicating a profit after interest of £632,000.

The report excluded the value of the Freehold interest which at the time was estimated at £150,000 giving a total expected profit of £782,000 BIG agreed a deal and facility to provide the full facility required in return for interest of 8% per annum and a Priority Profit Share of £285,000 over 18 months (£10,000 per month decrease offered for repayment before 18 months).

This represented 36% of the appraisal profit and an Internal Rate of Return (IRR) to BIG of 30%. The deal was put in place within 10 days. JV Structure The property was purchased in an SPV company with 100% of the shares owned by BIG. JVP and BIG simultaneously entered into a Development Agreement and Facility to outline responsibilities and protect JVP’s interests. JVP has the right to acquire the shares in the SPV for £1 on repayment of the debt, interest and profit share.

Management JVP is responsible for the refurbishment project and sales. Aitchison Rafferty are appointed Monitoring Surveyor on behalf of SPV to provide independent assessment on the cost, quality of the works and the build programme.

During the works JVP has amended some of the units adding floor space, accommodation and therefore value. The units are now all 1 and 2 bed with no studios. There have been issues with the design of the roof that caused a 4 months delay.

The project costs have increased by circa £400,000 and the facility needed has risen to £1.45 million and 24 months but the GDV has also increased by £700,000 according to Aitchison Rafferty. JVP has taken 10 formal reservations and has a contract in place to sell the freehold for £250,000, £100,000 more than budget. BIG have worked with JVP closely throughout the venture and have formally agreed to extend the facility as needed and increased the JV period to 27 months in return for a further £17,500 per month after month 18.

Property Development Case Studies

Wed, 05 Aug 2020 12:53:10 GMT

Some of the property development cases we've sourced funding for...

Mezzanine Finance: The developer spotted an opportunity to buy some land and build out 20 apartments and 2 offices. As he was already involved with 3 other sites, his liquid cash was under pressure. This office structured a proposal whereby mezzanine finance was used to facilitate 90% of project costs. The mezzanine funders took 14% of the project profit. Therefore the developer input only 10% of the project costs but retained 86% of the profits.

100% Finance: A first time developer spotted an opportunity to buy a pub to then convert it into a 4 bedroom house and build 9 houses in the grounds. The applicant had no liquid cash as an input. However, there was sizeable equity in this private residence. This office arranged 100% finance to buy and build out with the funder taking a charge on the private house as makeweight security.

Deferred Consideration: A restaurant owner had an outlet with a large car park. He had obtained planning to knock down the restaurant and build out 17 starter homes. He wanted to sell the project to a builder who had insufficient resources to input any funding. This office arranged 70% of the land purchase and 100% of the build costs to allow the project to progress. The 30% of the purchase price was left in by the vendor by way of a deferred payment that was honoured from property sales.

100% Joint Venture Finance: An experienced developer was in the middle of a large project which had used up his Working Capital. He spotted an opportunity to buy and build out a project but had no cash reserves or assets with equity. In turn, this office arranged a finance package whereby the funder provided 100% of all costs in return for only 40% of the profit. The developer input nothing into the project but retained 60% of the project profits.

Unconventional Case Studies

Wed, 05 Aug 2020 12:44:08 GMT

Some of the more unusual funding cases we've dealt with...

A client who wanted to remortgage a holiday cottage in Penzance, Cornwall. The client was employed as a contractor and able to supply accounts for the holiday let. The property was valued at £625,000 and a Lender was able to lend £345,000 to redeem the outstanding balance of the existing mortgage and release equity to fund improvements. The client chose a product that enabled them to roll up the interest over the two-year term.

An experienced landlord , with a large portfolio of properties, who had recently completed the construction of new student accommodation near to the University of Liverpool. The client wanted to pay off the development finance and raise additional funds for his next development project.

The accommodation was a row of nine terraced houses, each split into a seven bedroom HMO, providing lodging for 63 students in total. An added complication was that all the properties were held on the same title.

The total value of the properties was £3.3 million and the landlord wanted to borrow 80% LTV. R & E Finance was able to arrange a loan of £2.64 million with interest serviced, on a five-year term.

A 61 year old self-employed director who had successfully developed two adjacent four-bedroom detached houses on a plot of land in Oxfordshire. Both properties were listed on the same title and both were tenanted. The total value of the houses was £1.73 million.

The client wanted to raise £1.07 million to clear the development loan, pay off existing debts and fund a new project. A lender was able to structure a solution to meet the client’s requirements, with a product that enabled him to roll up some of the interest and service the remainder.

A limited company application, with three individual applicants , looking to purchase a desirable maisonette in Fulham for £400,000. The clients wanted to borrow £295,000 to buy the property but the rental value was only £1,495 per month and so the numbers did not stack up.

As the clients were experienced landlords, a lender was able to structure a solution by splitting the balance and enabling the clients to roll up interest of part of the loan and service the interest on the remainder. Because there were no monthly payments due on the roll up element of the loan, this portion was not subject to a stress test and so it meant that the serviced loan element, as it was now a smaller balance, met the required stress test.

As a result, the clients were able to invest in a sought-after property with robust potential for capital gains even though it delivered a low rental yield.

A buy to let investor who was looking to purchase a property in need of a new kitchen, bathroom, and modernisation throughout. The purchase price of the property was £200,000 and the investor intended to increase both the capital and rental value by carrying out the required work, with no requirement for the property to be tenanted.

With its Refurb to Let product, a lender was able to lend £124,000 (62% of the purchase price) to the borrower, on a 12-month term and then roll up all the interest on top. The minimum interest obligation on this product is three months and so, from the fourth month, the investor was free to remortgage or sell the property with complete flexibility.

A 50 year old self-employed ex-pat living in Zimbabwe . The client wanted to raise funds on a buy to let property in England in order to purchase another property abroad. The unencumbered detached house in Kent was already tenanted and valued at £875,000. The client wanted to borrow £300,000 on a five-year term and wanted to service the interest. The rental income was sufficient to cover the stress test for this loan balance and so a lender was able to mortgage the property, releasing the capital the client wanted to access.

A Russian national based in Europe who wanted to remortgage an apartment in London. The property was vacant and being marketed for sale, with a valuation of £7 million. The client wanted to borrow £3.5 million and although he was a successful real estate developer, he had no credit record in the UK.

A lender was able to lend the required amount, on a two-year term, with interest serviced monthly. The Early Repayment Charge on the product was only three months and so, if the client was able to sell the property in this time, he would be able to redeem the loan from the fourth month with no charge.