Colenko has exited a £755,000 ground-up development finance facility after the completion and sale of three homes in Buckinghamshire.
The facility funded both the acquisition of the site and construction of three three-bedroom houses and was agreed at 66% loan-to-GDV and 43% LTV.
Colenko provided an initial advance of £135,000 alongside £537,000 of development drawdowns, with the facility priced at 0.89% per month.
The borrower was an experienced architect and contractor who had previously completed several development projects privately but was undertaking his first scheme as a developer in his own right.
EXPERIENCE ASSESSED IN CONTEXT
Rather than relying solely on the borrower’s standalone development track record, Colenko considered his architectural and contracting experience alongside his credit profile, leverage and the structure of the proposed development.
Pre-commencement planning conditions were also considered during underwriting, with evidence required that they had been met or discharged before construction started.
The project subsequently encountered higher costs caused by inflation alongside supply-chain disruption, which delayed completion beyond the original programme.
SIX-MONTH EXTENSION
Colenko reassessed the viability of the remaining works and the proposed sales exit before agreeing a six-month extension to the facility.
Rather than automatically requiring another valuation, the lender considered the expected sales timetable and spoke directly to local estate agents about likely proceeds.
The three completed properties were subsequently sold, providing the exit from the development facility.
‘ADDITIONAL TIME NEEDED’
Rob Roscoe, CEO at Colenko, says: “The borrower brought strong architectural and contracting experience, even though this was his first development in his own right. We looked at that experience in context, alongside the leverage and the clear sales exit.
“When external pressures affected the programme, we reviewed the position based on current market evidence and gave the project the additional time needed to finish the works.”
