Davon was approached by an established developer who was well advanced with a niche development of five apartments and two cottages located in the heart of the New Forest town of Lyndhurst.
Davon was approached by an established developer who was well advanced with a niche development of five apartments and two cottages located in the heart of the New Forest town of Lyndhurst .
The developer had acquired the scheme, enhanced the planning consent and commenced with the development utilising a senior debt facility from one of the specialist debt providers with whom Davon works closely.
Construction work was well progressed when the developer decided he wished to release some of his capital tied up in the scheme in order to assist with the acquisition of another site.
The debt provider recommended he speak with Davon about structuring a mezzanine facility, knowing that the simplicity and flexibility of the mezzanine loans that Davon can provide would facilitate the solution to the clients short to medium term requirement for capital.
Accordingly, after meeting with the client, seeing the site and undertaking all initial due diligence an offer was quickly made to provide a mezzanine facility of £250,000 through The Strata Fund. The close working relationship enjoyed with the senior debt lender allowed a smooth progression from offer of a facility through to completion and drawdown of funds.
Construction work was soon completed on the scheme and marketing commenced with sales achieved and the mezzanine facility repaid within approximately six months from date of drawdown.
The very clean structure provided a simple rate of interest calculated on a daily basis and rolled up until repayment and the absence of exit fees allowed the borrower to benefit from the use of the capital without incurring punitive costs while providing maximum flexibility.
This a good example of how mezzanine finance through Davon can be used to facilitate the further growth of a developers business and also showcases how funds can be arranged for suitable projects at any stage of development.
Davon’s 25+ years’ experience in structuring funding for clients and its unique position in the funding market as a non-bank broker lender allows it to assist a wide range of clients with funding for their projects.
Attributed to David Norman, CEO of Davon Limited