The green hills of East Sussex are close to home for many of the team at Invest & Fund, so we were delighted to help finance the development of a new residential development in Polegate, right on the edge of the South Downs.
The developers, both new to Invest & Fund, sought finance for the purchase and redevelopment of a 2.2 acre plot into a 4-bed detached family home with a detached garage.
Following our credit assessment and due diligence process, Invest & Fund granted the developers a £448,067 facility over 18 months at 10% per annum to assist with the purchase of the property (£150,000), its subsequent redevelopment (£232,125), interest (£55,000) and fees (£10,942). We anticipated a total of four drawdowns to complete the project.
The lending opportunity
We published the lending opportunity to our Lender Marketplace with a gross fixed rate of 10.00% p.a, and an expected annual return to lenders of 9.25% p.a. For the developer, interest was rolled up and the rate fixed rate and the property was secured with a First Fixed Charge, Debenture and Guarantee.
Development started in late 2015 and completed in April 2017, and the property was sold in November 2017. At the end of the loan term, the developers repaid the development facility and all interest payments, giving lenders a net return of 9.25% p.a.
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