A property development company in Leicestershire required the funds to buy out a majority shareholder who needed to exit the business due to a divorce.

The security was valued at £1.75m and comprised a new development of 10 luxury residential houses (pictured above) – seven of which had been pre-sold – and a pair of semi-detached houses.

The customer had been introduced to Roma by Robin Daw, a commercial finance broker based in the East Midlands, who specialises in real estate funding.

The development site

As the case progressed, it was brought to light that the local authority supported enhanced planning on three unsold plots to create six houses, which would bring in an additional £600,000 of extra value to the site, thereby boosting the site and security value to a gross development value of almost £5m.

•   Avamore backs first-time developer with £400,000 bridge
•   HFBS saves Spanish holiday home purchase
•   Shawbrook completes £971,000 residential loan

Roma arranged a meeting with the new management team, where the lender found the project to be viable as there was significant working capital available to complete two of the pre-sold properties, which would enable a material capital reduction on the loan.

The ultimate exit strategy had also been pre-agreed as a development finance facility, which had already been put in place to build out the remaining plots.

Solicitors were then instructed to visit the site 24 hours after the meeting.

Scott Marshall, managing director at Roma, was delighted to complete the lender’s largest-ever loan.

“This was a very complicated transaction with property and corporate aspects, including assessing the value of a new development, dealing with a new specially created holding company, a driven management team and going beyond our usual criteria in terms of the loan amount.

“However, we helped provide an intelligent structure to the case and worked closely with both Robin Daw and [the] customer to progress the loan to completion, much to everyone’s delight.

“We are now in discussions with the management team to provide further funding for their next project.”