Inspired Lending has completed an £822,000 developer exit facility secured against the final two unsold flats at an eight-unit scheme in Sydenham, South East London.
The 12-month loan was provided at 70% LTV, with a rate of 0.89% per month, and is secured by a first charge over the properties.
Six of the eight homes at the newly built development had already been sold, leaving two units on the market. The refinancing repaid the developer’s existing borrowing while releasing equity from the completed scheme.
The SPV borrower will use the additional capital for other property projects already under way, rather than waiting for the remaining flats to be sold before accessing the equity.
CAPITAL RELEASE
Inspired Lending said the two properties remaining on the market provided the borrower with a clear exit route through their eventual sale.
Gavin Diamond (pictured), chief executive of Inspired Lending, says: “Developers can reach the end of a successful scheme with most of the units sold and still have a sizeable amount of capital sitting in the final properties.
“At that point, the question is not necessarily whether those remaining units will sell, but whether it makes commercial sense to leave that money tied up while they do.
“The final few sales can take time and developers have to think about what comes next in the meantime.
“If there are other projects already under way, being able to release equity from a completed scheme can give them far more control over how they deploy their capital rather than making the next stage dependent on the timing of individual property sales.
“That’s where developer exit finance can be particularly useful. The development has done what it was supposed to do, the bulk of the sales have completed and there is a clear route to repayment.
“Finance can then act as the bridge between finishing one project and putting that capital back to work in the next.”
