£1.4m Development Loan Secured for a 7 Unit Whitstable Project

£1.4m Development Loan Secured for a 7 Unit Whitstable Project

Our client duo purchased a semi commercial building in Whitstable, Kent using a bridging loan. The plan was to convert it into 6 residential units and 1 commercial unit.

With planning permission granted on part of the scheme, they needed to refinance onto a development loan, repay the bridge and get the build started, but a delay on the remaining planning made the deal more complex than a standard refinance.

The Problem

The original plan covered the full scheme, but a Bat Survey requirement meant part of the planning approval would not come through until several months later. The clients needed a lender who could move forward with what was already approved, repay the existing bridge, and structure the facility in a way that was flexible.

The Solution

We found a lender who was comfortable offering strong leverage, largely on the strength of the client's experience as a developer. The next step was structuring the deal so it could get through credit approval. When the valuation came back, it reflected a planning gain far better than any of us had expected. It was a positive result that does not happen often.

The Outcome

£384,060 was released on day one, which repaid the existing bridge and gave the client working capital to begin the works. A construction loan of £858,000 followed to fund the build through to completion.

The Results

• Purchase price £430,000
• GDV: £2,055,000
• Valuation £610,000
• Loan amount £1,397,000
• Day one net release £384,060
• Construction loan £858,000

The client was able to move from a bridging facility onto a development loan without losing momentum despite the planning process happening in stages. The existing debt was cleared and they had the funds needed to start the works on schedule. The result is a scheme of 6 residential units and 1 commercial unit in Whitstable that is currently moving forward as planned.

If you're working on a development deal with planning complexities, please speak to us. We're always open to have a conversation.

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