Arc & Co. closes £5.6m in short-term funding for two developer clients

By Bridging Loan Directory 26th September 2024

Specialist debt and equity firm Arc & Co. has secured two £2.8m loans for separate developer clients who needed to release equity and repay their existing debt provider, respectively.

For the first borrower, Arc & Co. Director Tom Berry arranged a £2.8m development exit facility, secured against a recently completed scheme of eight houses in the Midlands, to raise the equity required for them to take advantage of other opportunities.

Rather than wait for the sales from the completed project to come through, a short-term, development exit loan advances the necessary funds for the developer to move forward with other sites.

The 75% LTV, 12-month loan was secured at 0.89% pcm.

The second borrower had overrun on their build program, which in turn meant that they had also exceeded their development finance term.

The existing lender needed to be repaid, and a new facility was put in place to allow the developer to complete the project, with time to sell.

Tom obtained a competitively priced finish and exit loan of £2,8m secured against the North London scheme, comprised of nine residential units, at 75% LTV and pricing of 0.99% pcm.

Both loans were completed in eight weeks each.

Tom commented:

“We’re proud to have a varied network of providers, among which there are very few that can provide what is essentially a development exit loan in advance of practical completion.

For the second deal, this was the ideal solution for the borrower.

Developer exit funding is a great tool to give developers a competitive edge, by advancing the capital necessary to acquire new sites or progress existing ones, especially in what is still a recovering sales market.

For projects that need a bit more time and need the existing (often expensive) debt refinancing while they complete, finish and exit has been a valuable product.”