CASE STUDY
At Henry Dannell, we are proud to have supported a client in securing structured development finance for a four-unit townhouse project, despite significant funding constraints and limited development experience.
Client Overview
Our client, a new developer with limited prior experience, had successfully acquired a site for a townhouse development but had invested nearly all their capital in purchasing the land. With minimal liquidity remaining for construction, they faced a significant challenge: how to fund the build without a substantial cash injection.
Adding to the complexity, the site had a history of stalled progress under previous ownership. This context made many lenders cautious, viewing the project as higher risk due to its association with earlier failed development attempts.
Our Approach
We recognised early on that securing development finance for a less experienced developer with a constrained capital position would require:
- A compelling, lender-ready proposal
- A tailored strategy focused on loan-to-gross development value (LTGDV) rather than loan-to-cost
- Direct engagement with lenders who understand the real potential of well-located, small-scale schemes
By leveraging our strong lender relationships and in-depth knowledge of the development finance market, we negotiated a bespoke solution:
- A 70% LTGDV development finance facility, covering the majority of build costs
- A structure designed to reduce upfront capital contribution, making the project viable for the client
- A facility aligned to construction phases, improving cash flow and managing risk
Outcome
Thanks to this solution, our client was able to:
- Proceed with the build of four contemporary townhouses without requiring further capital investment
- Retain ownership and control of the project despite initial liquidity challenges
- Lay the foundation for a successful entry into the property development market
This case illustrates how strategic advice and lender relationships can unlock funding for:
- First-time or less experienced developers
- Small to mid-sized residential development projects
- Ground-up or self-build schemes where land has already been acquired
- Projects with a difficult history or perception in the lending market
Matt Karagul, Head of specialist lending at Henry Dannell, commented:
“Securing this solution was no small task, given the limited capital and legacy issues associated with the site. But by understanding the market, presenting a credible case, and knowing which lenders to approach, we delivered an outcome that empowered our client to move forward with confidence.”
Expert Support for Development Finance
Whether you’re a first-time developer or an experienced investor taking on a new project, we offer bespoke advice on:
- Ground-up development finance
- Self-build and small-scale residential projects
- Development finance for barn conversions, townhouses, or infill sites
- Refinancing stalled or legacy development sites
With access to a wide range of lenders and a deep understanding of construction-led funding, our advisers can help you secure the capital needed to bring your plans to life.
Contact us today to explore tailored development finance solutions.
This is a case study and not indicative of typical results. Past performance is not necessarily representative of future results. This information is for general purposes only and does not constitute financial advice. Please seek professional advice before making any financial decisions.
Important Notice: Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it.
