We were approached by a property developer. He already owned a large piece of land in the south west through his developing company and had planning permission for 15 units, worth around £800,000. He wished to buy the adjoining piece of land to add an additional 6 units to the development. To do this, he needed to borrow £450,000.
He also owned another local development nearing completion. This was currently worth around £1.5 million and had a small loan of £240,000 secured on it.
We met with the client to fully understand his background, his experience and his plans, so that we could build a comprehensive proposal with integrated financial and cashflow projections for the prospective lender.
As we keep up to date with the market, the following day we met with a private bank, who we knew was a new entry into the development finance market.
By using both the proposed development and also the existing developments as security, and using cash projections from the development which was nearing completion as evidence, we were able to show that our client would have cash available to service the debt. Because of this, were able to get the lender to agree to the full £450,000 needed.
As a new entrant to this lending market, we were able to negotiate terms that were significantly better than other existing lenders. The bank agreed the facility at a cost of 1 per cent per month for a maximum of 12 months. This was around 40 basis points cheaper than other options, saving our client around £1,800 per month in interest costs.
The £450,000 loan allowed our client to buy the additional piece of land and increase his company’s pipeline of properties. By dealing to us, he was able to save over £20,000 compared to the quotes he had received from rival lenders.
“I have been absolutely thrilled with Oakmead Finance. They worked on this with professionalism and a spirit that has been magnificent — consistently, at every stage of every twist and turn. I am genuinely in your debt and hope over time to be able to give back a tiny bit of all I received from you.