roma finance

Roma lends £400,000 to Scottish developer facing insolvency on a site

Roma Finance has provided a loan of £400,000 to help a Scottish property developer facing insolvency on a site that needed funding to get it completed.

The loan was used to redeem the existing lender and provide working capital for two detached chalet villas on the outskirts of Kelty, Scotland.

When the relationship with the developer’s existing lender had become untenable, the customer was referred to Roma and, after discussing the case directly with the customer, an agreement in principle was issued and a site meeting was arranged the next day. 

Following this, Roma issued loan documents and was able to obtain a retype of a valuation carried out for another lender, which reduced the customer’s overall fees. 

At legal stage, it was noted that the charge with their existing lender had yet to be registered with the Scottish Land Register, which meant the deal had to be restructured between the solicitors. 

Roma liaised with the existing lender to confirm the current position, which meant the latter held off instructing their solicitor to prevent insolvency proceedings. 

The loan was provided with a term of nine months and the LTV stood at 60% on day one, falling to below 50% on completion of works.

The exit route for the bridging loan is set to be the sale of the properties, which are now being marketed and have received strong interest due to the high quality of the build.

Allan Smith, business development manager at Roma Finance, said: “This was a complex case as it was initially very personal to the developer who faced the threat of insolvency on what was actually a very viable and high quality project.

“I liaised with the previous lender to demonstrate our solution would work within the tight timeframe and I’m very pleased at successfully achieving such a positive outcome for the customer.”

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