When one of our developers approached us with a request for £5m+ in development funding, we jumped at the chance to prove our ability to fund good quality loans at the top end of lending range.
The loan inquiry came in via our Business Development Team, who acted as the first line of assessment. They passed it on to our inhouse Credit Team, who completed full due diligence before putting it up to our Credit Assessment Group for final approval.
The result? Our Credit Assessment Group approved the development application and in November 2017 we agreed a £5.6m overall facility and provided funding for the first £2.37m drawdown.
About the development
The site, located in Essex covered 0.63+ hectares of land comprising standing stables and warehouses. The original planning permissions catered for 4 detached and 4 semi-detached houses, subsequently broadened to 12 semi-detached dwellings.
Working with Invest & Fund, the developer agreed an overall facility of £5.6m, starting with a £2.37m drawdown at an expected Loan to Cost ratio of 72% and an 18-month term. Repayment is expected on sale of properties.
The lending opportunity
The lending opportunity offered a gross rate of 9.0% per annum over an expected term of 18 months, effective from November 2017. All lending is secured by a first legal charge, an all assets debenture, capital guarantees and cost overrun guarantees.
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