Completed £1.25m Development Exit Loan!

A new client approached us due to the fact that they were close to the end of their existing development loan and would be faced with a potential default cost of 15.75% of the outstanding loan on the day that it goes into default. This would prove to be extremely costly. The client was close to finishing a substantial barn conversion and required a new facility to give them time to put the finishing touches to the property and then place it on the market to sell. They asked us to get three different quotes therefore we made sure that our chosen lenders were fully aware of this. The client then chose their most favourable deal based upon the rate and service. The lender instructed a valuation which, to the surprise of the client, came out less than expected. The lender insisted they would only lend against the 90 day value and not the market value, despite them being “market value lenders”. The revised terms were issued, which were sufficient to repay the existing lender but did not provide the additional funds the client required. We therefore went back to the second choice lender, who was happy to lend against the market value. They provided terms for a gross £1.25m, 12-month interest deducted loan, which was at 69% loan to value. The valuer was contacted and they re-addressed the valuation report to the new lender and lawyers were instructed. Completion took place this week, three weeks before the existing loan would have gone into default. Our target at Restore is to always provide an excellent personal service to our clients. This case study also demonstrates how important it is to review your existing facilities well in advance before the end of the term.