The 70% LTGDV facility will fully fund the conversion and extension of two neighbouring office buildings into 11 affordable flats within walking distance of Southampton town centre.
The loan was agreed on a 24-month term to offer additional flexibility, with interest to be serviced in the final months through sales proceeds.
In addition to the development loan, the borrower also secured a mezzanine facility to supplement their equity injection.
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Marc Morris, underwriter at Fiduciam, said: “At Fiduciam, managing credit risk is not about saying no, but rather seeking the structures, relationships and professional support that enable the risk to be mitigated.
“In this case, the principals brought considerable experience designing and managing property, but no experience leading development projects with structural works.
“We gained comfort through the use of an experienced contractor operating under a Joint Contracts Tribunal (JCT) contract and independent project monitoring.”
Ryan Parrett, BDM at Fiduciam, added: “Throughout the Covid-19 pandemic, we supported existing developers overcome delays across the build cycle with reliable, flexible finance.
“After the decline in the number of SME developers over the last 30 years, it is encouraging to now see new talent entering this market.
“With our reduced 2022 interest rates, starting from just 0.57% per month, we hope to fund many similar projects over the coming months.”