The client who approached Arc & Co was seeking a higher-geared development finance product for their scheme, however, securing a 70% LTGDV facility can be difficult in the current market.
Arc & Co was able to argue the quality of the project and experience of the client to the lender, Ingenious.
The £2.63m loan was provided at 70% LTGDV and at 81% LTC.
The term is for 20 months and was lent at 8% per annum.
“When approaching a new development lender, especially in current times, it would be wise to ask your prospective lender if the funds are on demand or committed,” commented Tom Berry, asset finance adviser at Arc & Co.
“If the facility is on demand, the lender can recall the funds at any point.
“If they are fully committed, you have the security that the funds will be honoured until full completion.
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“Having the security of funds in uncertain times, even with a slight increase in expense, is a small price to pay for control.”
He explained that developers are looking for fully committed facilities now more than ever.
“The current circumstances of Covid-19 have created a volatile market for development finance.
“Developers want the security and knowledge that there funding isn’t going to be called in halfway through the project.
“We are striving to secure options in the market with lenders such as Ingenious with fully committed facilities to provide the best possible funding for our clients.”
Harry Cloke, senior investment manager at Ingenious, added: “When we lend, we are committing to see the project right through to completion.
“Ingenious always provides committed facilities and we believe that confidence is a key reason for the lasting relationships we have created with so many of our developer partners.”