Merryoaks Secures £5.9m Development Loan for 6-Unit Scheme in Essex

We recently helped an ambitious developer secure a £5.9m loan for a 6-unit scheme in Essex with a GDV of £9.8m. The project came with a long list of challenges, from valuation issues to land negotiations, difficult tenants, and lender hesitations. Despite all of this, we successfully closed the deal with United Trust Bank, helping the client transform from building a single home into a much larger, high-spec development.

The Problem

The developer behind was transitioning from building a single home to taking on 6 high-value, modern homes. It was a major jump in both GDV and construction costs, which made many lenders cautious.

The issues:

• The developer’s net asset value was at the very lowest threshold acceptable.
• The contemporary design of the homes put lenders off, as well as the high-value single unit scheme.
• The site valuation came in below expectations, originally it was £10.2m, but was downvalued to £9.4m.
• One of the properties the borrower used as security had rogue tenants refusing to leave or pay rent.
• The land deal itself was complex. It was tied to a neighbouring landowner through an option agreement. The strike price was too high, and negotiations broke down when the landowner’s son returned from Australia and tried to ruin the entire deal.

The Solution

Our role went far beyond just brokering the finance. We became a key entity in every stage of this process and helped the borrower:

• Find a lender who understood both the borrower and the deal
• Negotiate with the valuer and increase the GDV
• Evict rogue tenants through a critical agreement before the lender became aware of any issues and disclosure was required
• Manage negotiations with the landowner, including recommending a solicitor to improve communication
• Navigate legal, valuation, and insurance challenges by working closely with all parties including quantity surveyors, solicitors, insurers, and lenders to keep the deal moving
  

With United Trust Bank, we completed the deal in 12 months and stayed involved the whole way to make sure it closed successfully.

The results

• A £5.9m development loan was secured with a top lender
• The valuation increased by £400k, improving overall leverage
• Dodgy tenants were evicted, avoiding us disclosure issues and delays
• Landowner negotiations were resolved, and the full deal was completed
• The client moved into their next stage of growth and finished their first multi-unit development

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This was a deal that needed deep involvement and full support throughout. We specialise in complex projects like this one, and we’re always ready for the next challenge. Let’s have a conversation.

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