Avamore Capital funds £6,680,209 part complete development loan
Avamore Capital has completed a Part Complete Development loan for £6,680,209 with Positive Commercial Finance in South London.
The borrower purchased the site in May 2016 with their own equity. In January 2021 they obtained planning permission for the demolition of the existing buildings and the construction of twenty-five self-contained units broken down into one studio flat, thirteen 1-bedroom, five 2-bedroom, two 3-bedroom and four 4-bedroom self-contained flats.
The site will have a gross development value of £10,590,000 once complete.
The borrower has extensive experience in new build projects and has produced four similar ground-up schemes in the local area previously.
Given their demonstrated capability in completing projects of this nature, Avamore was able to lend at 7% + BBR fixed for 15 months.
Works commenced on the project in early 2022 and were self-funded, with the construction procured on a self-build basis.
After the project had been going on for eight months, in August 2022 the borrower decided to refinance whilst the scheme was part complete.
At this time, the build was well-progressed, however, given market conditions over the next year, they were faced with cost overruns alongside unexpected delays to construction.
By August 2023, the project was wind and watertight with all external works nearly complete however, the existing lender was unable to refinance or extend the loan for the borrower to close off final works.
Therefore, the introducing broker approached Avamore for funding under its Part Complete Development product.
Avamore offered funding for 100% of the remaining works in addition to refinancing the existing loan.
Relying on their experienced underwriters, Avamore Capital adopted a commercial approach to assess the build done to date.
From this, they were able to offer the borrower an advance construction drawdown on Day 1 of the loan for invoices and works certified as complete by the monitoring surveyor between the time of their initial report and completion.
Further demonstrating its commitment to putting the customer first, Avamore also offered the borrower a longer term which allows them to not only complete the works but gives them extra time to exit via sale.
John Waddicker, Director of Positive Commercial Finance commented:
“From the outset, Avamore really took the time to understand the situation from the borrower’s point of view.
They provided solutions that were flexible and responsive to the borrower’s circumstances and really went the extra mile to make sure that the borrower was put in the best position.”
Cameron Linnell, Relationship Manager at Avamore Capital commented:
“It’s deals like these that our Part Complete Development product was created for.
In situations where borrowers, who invest a large amount of their own time and money, are facing obstacles in financing their part-completed sites, we can offer them the right support to see those projects through.
Offering flexibility in a period of volatility highlights our value as a true specialist lender and we’re happy to support strong borrowers to keep doing what they do best.”