Bridging finance – speed is the key

By Bridging Loan Directory -

 

Signature PDFWhen it comes to bridging finance, apart from having the necessary funds available, the speed of any decision to lend can be the difference between a deal being done and a property developer suffering real problems.

The ability to move quickly, with all lending decisions made in-house, ensured Signature Property Finance could support property developer Mr. Odedra, when a deal ran into problems. 

Mr. Odedra had agreed the purchase of a development in Telford, Shropshire, financed through a major high street bank, but just days before the funds would be needed, delays occurred. Unfortunately, the sellers were not prepared to give an extra few weeks for completion as there were several other parties after the deal.

Through a mutual contact, Mr Odedra was made aware of Signature Private Finance and their commitment to make fast property finance decisions. With both Signature and Mr. Odedra being based in Birmingham, it was a simple matter to arrange a face to face meeting with the making the decision to lend.

Bilal Ahmed, CEO of Signature, explains:

“Following Mr. Odedra’s call, outlining the problem, we invited him into the office to discuss the property, the finance and the timeline – which we knew was only a matter of days.

“The value of the property, a development requiring completion, was complicated by the Council’s Section 106 agreement with the original developer, which required seven of the final 24 homes to be made available for social housing. This issue only came to light on Monday, with the funds expected on the next day and would have ended the deal for many finance companies.

“I like to think Signature is a different sort of property finance business, with the emphasis more on property than on finance. We make all our lending decisions in-house, with the value of the property in question our main concern. The team here at Signature are experienced in all aspects of the property market, from purchase and development to refurbishment and disposal, ensuring we are inclined to see the value the developer sees.

“In this case, although the Section 106 agreement had affected the value of the development, requiring Mr. Odedra to offer some of his other properties as extra security, we could see the value in what he was proposing. We were effectively lending on a development with no Building Regulations completion certificate and no NHBC guarantee, but still the value was evident to our experienced eyes.

Mr. Odedra takes up the story:

“Having spent weeks negotiating with the bank, it was disappointing to hear the release of funds would be delayed, potentially leading to me losing the deal only days before my deadline; the pressure was on. There were moments when I was doubtful of achieving the required £920,000 loan in just two full working days.

“However, being experienced property developers we knew what needed to be done to close the deal. We had other options to secure the funding but we decided to use Signature Private Finance as we could talk to them face to face and demonstrate we are experienced in this business.

“Having met with and explained the situation to Bilal and his team, I was confident we would get the deal done, as the focus of their interest was the value in the property, not ticking boxes on a finance application form. With the additional security provided on other properties in my portfolio I was confident that Signature would deliver. True to their word, the full £920,000 was deposited into my solicitor’s account an hour before the Wednesday 2:00pm deadline, allowing me to take ownership of the property and complete the development.” 

Signature Private Finance is a privately owned Principal Lender, backed by private equity funding with significant resources, offering an extensive range of flexible finance products including residential and commercial bridging, light refurbishment, VAT bridging, revolving trading facility and auction finance.