The transaction supported an experienced residential developer, which has previously completed five ground-up schemes.

The development, located in Cambridgeshire, is made up of eight detached houses, including six four-bedroom homes and two three-bedroom homes.

The funding structure incorporated a deferred purchase price arrangement, with staged payments to the vendor and the construction of a ninth unit for the landowner.

This ninth unit sat outside Avamore Capital’s security and was not included within the funded build costs.

In addition, the scheme’s GDV was revised lower than originally anticipated, placing pressure on the overall financial metrics and significantly reducing lender appetite.

Avamore required clear evidence that the borrower could independently finance the construction of the vendor’s unit and undertook a detailed assessment of the sponsor’s experience and delivery track record.

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Senior development funding was structured alongside a mezzanine finance provider to support the overall capital stack, while a pragmatic view was taken on contingency levels in light of the borrower’s proven capability.

Avamore also supported the borrower in introducing an investor specifically to fund the ninth unit, ensuring sufficient liquidity and mitigating the absence of security over that element of the scheme.

This approach enabled the lender to provide 100% of the development funding required, allowing the transaction to proceed despite its non-standard structure.

The completed funding structure delivered a total loan of £2,627,368 against a total project cost of £3,033,648.

Commenting on the transaction, Adam Butler, director of sales and marketing at Avamore Capital, said: “This was a highly structured and complex development, involving a deferred purchase price and a non-standard security position that many lenders would struggle to support.

“By focusing on the borrower’s experience, real cashflow strength and the fundamentals of the scheme, we were able to take a pragmatic view and deliver a funding solution that worked for all parties.”