Successfully Secured Finance for Townhouse Development Project with Minimal Cash Injection

townhouse development

We’re proud to share a recent success story where we helped our client, a developer with limited experience, secure financing for a new four-unit townhouse project, despite significant challenges.

For many property investors, the dream is to build something from the ground up. But between securing the land and hammering the first nail, there’s a big financial hurdle to jump.

Overcoming Challenges to Fund the Project

The biggest obstacle? Our client had invested all their capital into acquiring the land, leaving very little for construction. Potential lenders may be familiar with static development sites, where previous developers failed to realise the scheme, leaving funders wary.

Many underestimate the role a specialist finance adviser can play, but when it comes to development finance and a project of this nature, securing finance without an experienced adviser could prove near impossible. With a comprehensive understanding of our client’s needs and leveraging our expertise and strong lender relationships, we were able to secure a unique finance structure for our client – a 70% Loan-to-Gross Development Value (LTGDV).

This meant our client could inject significantly less of their own capital, making it a viable solution and offering them the funds required to complete the development project.

Matt Karagul, Specialist Finance Adviser at Henry Dannell, comments: “Securing this solution for our client was no mean feat due to the previous failed development attempts, which highlights the importance of working with an experienced adviser with a deep understanding of the market and a diverse network of lenders. We were thrilled to support our client in fulfilling their objective and look forward to continuing to support them on their journey to seeing the finished project”.

If you’re a developer or investor facing financing challenges, our team of specialist finance advisers are here to help.

Please note: 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.
Author:
Matt Karagul
Specialist Finance Adviser
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