Exclusive: Roma rescues credit crunch victim to fund new build

Exclusive: Roma rescues credit crunch victim to fund new build



Specialist finance lender Roma Finance has funded a client’s major new build as well as repairing their credit profile after they fell victim to the credit crunch….


Specialist finance lender Roma Finance has funded a client’s major new build as well as repairing their credit profile after they fell victim to the credit crunch.

Case study fact file:

•    Clients had a bank halt a major project during the credit crunch in 2008
•    Were successful property developers but needed finance for a new build project of a      3,000 ft2 house
•    Roma Finance provided a £235,000 bridge over six months to release bank charge so project could start
•    Plot of land for new build on the estate worth £250,000
•    Cottage in grounds also worth £250,000

The credit crunch came quickly and unexpectedly and many experienced property professionals were affected.  Having had a string of successful developments, the bank pulled finance on a major build in 2008 and these clients lost a significant amount of money and their credit profile was severely affected.

When Roma Finance met the client to review the proposal, they owned an estate comprising a main residential property and a separate cottage sat over an acre of land. The primary residence was worth £600,000 but this had a mortgage on it of £600,000, a £50,000 second charge and five equitable charges on the title.  

The plan was to partition the land so that it could be sold with planning for a new 3,000 ft2 house. The building plot with planning permission was worth over £250,000 and this would be used to exit the bridge. Once this was completed, phase two would be to renovate the cottage so it could be sold to generate further profit.

After fully reviewing the client, the proposal and the opportunity to repay loans and restore the client’s credit profile, Roma Finance provided a £235,000 bridge over six months to release the charges on the property, allowing the project to get underway.

Commenting on the deal, Scott Marshall, Lending Director of Roma Finance said: “This case highlights the benefits of the way Roma Finance does business, meeting every client and fully understanding their property experience and the plans they have for their development project.

“Many experienced people were affected by the credit crunch and, through no fault of their own by banks pulling the plug on projects, found themselves with good long term assets but also some debts they found difficult to reconcile. Having worked closely with this client, they have demonstrated their experience and we will now back future developments.

“In fact we are already discussing the next project which focuses on renovating the cottage on the estate. This is worth £250,000 now, but valued at £500,000 when refurbishment works are completed, so we are pleased to have turned the situation around for this particular client.”

James Hardwick of Charleston Financial added: “We’ve been working with Roma Finance for a while now and this case is yet another example of how they look at deals differently from other bridging lenders.  

“These were entrepreneurial clients with a strong background in development. The case was approved within 24 hours of the Client Visit and funds were released seven days later.  A great service once again.”


 



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