The borrower purchased the site in May 2016, and received planning permission in January 2021 for the demolition of the existing buildings and the construction of 25 self-contained flats, with an expected GDV of approximately £10.6m.
Works commenced on the project in early 2022, all self-funded by the borrower, and in August 2022, the client decided to refinance while the scheme was part completed — however, due to market conditions, the client was later on faced with cost overruns and unexpected construction delays.
As the existing lender was unable to refinance or extend the loan to close off the final works, the client approached Avamore Capital to obtain the necessary funds.
After assessing the build done to date, the lender was able to offer the borrower an advance construction drawdown on day 1 of the loan for invoices and works certified as complete by the monitoring surveyor between the time of their initial report and completion.
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Avamore Capital provided the £6.68m loan at a day-1 LTV of 68.2%, priced at 7% + BBR over a 15-month term, to allow the client to finish the works and have extra time to exit via sale.
Cameron Linnell, relationship manager at Avamore Capital (pictured above), commented: “It’s deals like these that our part-complete development product was created for.
“In situations where borrowers, who invest a large amount of their own time and money, are facing obstacles in financing their part-completed sites, we can offer them the right support to see those projects through.”
John Waddicker, director at Positive Commercial Finance, added: “From the outset, Avamore really took the time to understand the situation from the borrower’s point of view.
“The firm provided solutions that were flexible and responsive to the borrower’s circumstances and really went the extra mile to make sure that the borrower was put in the best position.”