Specialist debt and equity advisory firm Arc & Co. has assisted a developer with a bridging facility to secure two conversion properties.
The site in question comprises a farmhouse with planning to convert two barns into four-bedroom homes.
Initially, the borrower—who is experienced and has several similar conversions under their belt—had development funding lined up. However, upon receipt of the valuation, which came in under what was expected, the lender pulled their offer.
Arc & Co. advisor Dieter Kerschbaumer took the lead on this case, which was introduced by Henry Simpson at London Belgravia Brokers.
Dieter set about arranging a bridging facility to secure the site with a lender that could act fast, could support the leverage needed, and had competitive terms.
The £1m facility at 70% LTV is secured against two assets: the £950k farmhouse being acquired, and another partially completed, unencumbered converted barn worth £650k.
The 12-month loan was priced at 0.84% and provided the developer with 100% of the purchase funds as well as working capital to finish the part-complete site.
Dieter commented:
“It is important to have access to a network of lenders who can kick into action when other providers can’t. It is not uncommon for valuations to trigger a re-evaluation of lending appetite, but, in this case, the change of decision put the developer in danger of losing the site altogether—and potentially making way for it to become available to a competing purchasers.
“Bridging remains an exceptional tool for those who need to get funding fast. The borrower’s existing assets, track record and uplift plans made this a great opportunity for the right lender, and we’re delighted to have facilitated this deal.”