This month, Regentsmead have proven that value for money is key when choosing a lender. Following on from a case study that appeared exclusively in Bridging and Commercial last year, aptly titled “cheap can also be expensive”, the same developer has since chosen Regentsmead’s services over a well-known bank for his substantial project in Solihull, West Midlands.
This month, Regentsmead have proven that value for money is key when choosing a lender.
Regentsmead is assisting the new build of two detached houses, providing a facility of £700,000 towards the build costs and £450,000 towards the existing site debt on a GDV of over £2.3 million. In the original case with this particular developer, Regentsmead was able to agree a facility for the client that had been let down by three other lenders at the time, and release funds at lightning speed within a week of meeting the client.
Speaking at the time about his original contact with Regentsmead the client noted, “I think it’s the fastest transaction we’ve ever seen – we called on Monday and the funds were in our bank on Friday.”
The original development site in Solihull, West Midlands which was successfully constructed and sold in just over 12 months.
The client, Blossomfield Developments, have since purchased a new site using a bank to supply bridging finance. The experience of dealing with a bank must have been a throwback to their original search for funding which lead them down three dead-ends, albeit with potentially cheaper sources. After securing a purchase of the new site, they were then faced with a dilemma of choosing between a cheaper source of finance with a cumbersome and inflexible lending approach, or a slightly dearer Regentsmead who had already proven to be fast, flexible and delivering a service that is second to none.
James Bloom, Chief Executive of Regentsmead, said: “We know that when developers shop around one of the main attributes they look for in a lender is how low a rate they can get. In truth the focus should be much more towards value for money. Whilst some lenders offer a lower headline rate often it is for a reason.
When we first met this client they had tried to go through three other cheaper sources of funding, one of whom had agreed to lend only for it to transpire that they had allocated those funds elsewhere – the client was in a real mess. Fortunately they have looked at the same scenario this time around and now appreciate that, despite paying a slightly higher rate, the levels of service and flexibility offered by Regentsmead will only benefit their project in the long run. The client has assurance that funds are there and released on time and if there was an issue on site we are able to help solve any problems immediately.
After discussing this case with the client in August the bank has since been refinanced and funds have already been released towards the build. He now appreciates that cheap is certainly more expensive when it comes to property developments!”
The developer commented: “Regentsmead [was] instrumental in my previous project where I received funds within a matter of days and they performed superbly throughout the project which helped contribute to the success of the development.
“When I assessed my new project I had the option between using a specialist secondary bank or Regentsmead. I tried the bank purely for the rate and found that although they were cheaper the service was slow and cumbersome and it re-enforced my reasoning for dealing with a specialist lender like Regentsmead.
“I re-financed the bank within a very short period of agreeing the facility with Regentsmead and I can really see what [it means] about cheap can be expensive and value for money. For a developer time is money and a cheaper rate could end up costing me more in lost time and overruns in my projects.
There is never any red tape or bureaucracy and I can speak directly with decision makers which from a developer’s point of view is priceless. I can really see what Regentsmead mean now when [it says] you get what you pay for!”