Development Finance
£1.4m
£1.4m Development Finance — 13 Apartments
Property Developer
Facility Size
£1.4m
Transaction Type
Development Finance
Client Type
Property Developer
Sector
Property Finance
Structure
We positioned the project with two merchant banks and obtained a GDV valuation from Knight...
Outcome
Two heads of terms were issued. The client selected the offer reflecting the best overall...
01
Client Situation
A building company with a 10-year track record in York was ready to deliver a 13-apartment development. Its previous equity investor, however, became unavailable following an economic downturn, leaving a gap in the funding structure that needed to be filled before the project could proceed.
02
The Challenge
With the original equity withdrawn, the scheme needed a lender prepared to take a considered view of the project, the developer's track record and the end value — and to fund both the site acquisition and the build in a way that worked for the programme.
03
Lender Considerations
Development lending turns on a credible gross development value, the developer's experience, a realistic build programme and staged drawdowns. Just as importantly, the developer needs to be able to compare competing offers on true overall value rather than headline rate alone.
04
Structure Used
We positioned the project with two merchant banks and obtained a GDV valuation from Knight Frank. The structure offered a 50% advance against site acquisition and 100% of build costs drawn in agreed stages, aligned to the build programme.
05
Outcome
Two heads of terms were issued. The client selected the offer reflecting the best overall value and flexibility — 2% set-up and 2% exit fees at 7% over three-month LIBOR — securing the £1.4m needed to deliver the scheme.
06
Key Lessons
Losing an equity investor does not end a viable scheme — it changes the funding route.
An independent GDV valuation from a respected firm strengthens a development proposition.
Competing offers should be judged on total cost and flexibility, not just the headline rate.
Client details have been anonymised. Figures and rates describe a completed transaction at the time and are not indicative of current terms. All finance is subject to status, lender criteria and individual circumstances. Past outcomes do not guarantee future results.
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