Alternative Bridging Corporation has provided a £1.2 million overdraft facility to finance the construction of two houses in North West London.
The borrower, a limited company, had acquired a development site with planning permission for two homes but wanted to avoid the staged drawdowns and monitoring costs associated with conventional development finance.
Alternative Bridging structured the facility against three buy-to-let investment properties at a blended loan-to-value ratio of 65%.
The lender said its Alternative Overdraft would allow the borrower to draw funds when required during construction, without regular site inspections.
The borrower plans to exit the facility by refinancing the two properties after the development has been completed.
The Alternative Overdraft can be secured by a first charge over commercial or residential property, or a second charge over residential property.
Phodis Maratheftis (pictured), business development director at Alternative Bridging Corporation, says: “Not every development project fits neatly within traditional development finance, and this case demonstrates the value of taking a more flexible approach.
“The client had suitable investment properties that could be used as security, which enabled me to structure an Alternative Overdraft giving them access to funding as and when required throughout the development, rather than relying on traditional staged drawdowns.
“For brokers, it highlights why it’s important to look beyond the development itself when considering a client’s funding requirements.
“By taking a wider view of the borrower’s assets and circumstances, we can often find a funding solution that gives experienced property professionals greater flexibility and control.”
