Inspired Lending has completed the repayment of a £6.3 million refurbishment facility after supporting a borrower through delays and rising costs on a mixed-use redevelopment in Surrey.
The specialist lender said the transaction, its largest loan to date, has now been repaid in full following the long-term refinancing of a mixed-use investment property in Shepperton, north Surrey.
The facility was originally agreed at £5.7 million to refinance the borrower’s existing lender and fund the refurbishment of a property comprising 11 retail units and 25 residential flats on Shepperton High Street. During the project, Inspired Lending increased the facility to £6.3 million to provide additional funding as the refurbishment programme encountered a series of challenges.
According to the lender, refurbishment works took longer than expected and costs exceeded the original budget, leaving the residential flats vacant for an extended period and placing pressure on the borrower’s cashflow.
At the same time, the planned disposal of external assets was delayed and generated lower proceeds than initially forecast, further affecting the project’s funding position.
Inspired Lending also said claims relating to intercompany loan balances involving the borrower required extensive negotiations with external parties while refurbishment works continued.
The lender agreed to provide additional funding and extend the loan term after concluding the project remained commercially viable. This enabled the refurbishment to reach practical completion before the facility was refinanced through a longer-term funding arrangement.
Inspired Lending said its privately funded lending model enabled it to make decisions throughout the life of the transaction without being constrained by third-party funding requirements.
Gavin Diamond, chief executive of Inspired Lending, says: “The real measure of a lender isn’t on loans where a project runs exactly to plan. It’s what happens when it doesn’t. Property projects are living things and circumstances can change, particularly on larger and more complex schemes.
“The important question is whether everyone involved is prepared to keep making sensible commercial decisions as new information comes to light. If your funding model leaves little room to respond, even good projects can become unnecessarily difficult.
“Because we lend using private capital, we have the freedom to assess what is actually happening rather than what a funding agreement says should happen.
“That allowed us to keep backing a project that still had a strong long-term outcome, work constructively with all parties involved and ultimately see the borrower refinance successfully once the refurbishment had been completed. That’s exactly the sort of flexibility experienced borrowers value when undertaking larger projects.”
