Nick Warren

UTB helps SME developer avoid late payment penalties from contractors



United Trust Bank (UTB) has helped an SME developer to avoid incurring late payment penalties from contractors with the help of a bridging loan.

The developer had recently finished a self-funded, new-build project with a sale agreed for completion before Christmas 2016.

He had arranged to pay various contractors and suppliers from the sale proceeds before the festive break.

However, the purchaser experienced delays with their chain in November and it became apparent that the completion would most likely be moved to January at the earliest.

The developer had a strong relationship with the contractors and wanted to honour his word, as well as wishing to avoid any late payment penalties with suppliers.

As the build was entirely self-funded from the developer’s own resources – and with little time or appetite to arrange a substantial overdraft extension or other funding – he sought to arrange a bridging loan secured against the new property.

With a relatively low LTV of 30% and a buyer lined up to complete the purchase in the new year, UTB was able to agree the loan and proceeded quickly with the deal.

The developer drew down the loan as required in mid-December and ensured his suppliers and contractors were paid on time.

“Bridging loans are an extremely versatile funding solution and releasing equity from a property to provide short-term working capital is just one of the ways in which individuals and SMEs can benefit from their speed and flexibility,” explained Nick Warren, bridging sales manager at UTB (pictured above).

“In this instance, we were able to relieve our customer of financial stress, while working to a very defined deadline and subsequently ensured that other parties depending on his payments were not left short of cash at Christmas either.”


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