Mortgages for Business helps client gain further advance in 6 days

Mortgages for Business helps client gain further advance in 6 days



Mortgages for Business recently helped an existing client get a further advance in just six days to complete the conversion of warehouse into seven residential apartments .


Mortgages for Business recently helped an existing client get a further advance in just six days to complete the conversion of warehouse into seven residential apartments.

The funds were required because the project was over-running and the contractor’s fees had increased.

Highlights

Further advance: £210,500
Initial loan: £1,952,500
Total loan amount: £2,163,000
Development costs: Initial forecast £1,952,500. Actual costs: £2,162,500
Initial GDV: £6,180,000
New GDV: £6,600,000

The converted warehouse development
 
The client had originally contacted Mortgages for Business for help in sourcing a loan of £1.9 million to convert an old Thames warehouse, (which had most recently been used as a single residential dwelling), into seven luxury apartments. The client was an experienced developer who had been successfully renovating, converting and building properties since the early 1990’s.

The client had purchased the warehouse in 1995 then spent a number of years fighting to get planning permission for the seven apartments. This had been a struggle due to its listed building status.

After permission was finally granted, Mortgages for Business helped the developer raise £1.9 million to cover the development costs. Works began in August 2014 and the project was due for completion in February 2015.

At the end of September 2014, the project was running slightly behind schedule and an unexpected increase in contractor’s fees meant the client needed more finance to complete the development. The most cost-effective route was returning to Aldermore Bank, the original funder, for a further advance.

Commenting on the situation, David Whittaker, Managing Director of Mortgages for Business said: “The gross development value had increased to £6.6 million. This combined with the relatively small initial facility meant that the required sum of £210,500 still only brought the borrowing up to 33 per cent of GDV. So Aldermore was happy to lend and was able to release the funds within six working days.”

The speed of the deal helped the developer get the project back on track and the apartments are due to be finished by the end of the month.


 



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