Fiduciam provides £3.62 million hybrid development loan

By Bridging Loan Directory 21st June 2022

Fiduciam, the institutionally funded bridging and development lender, has provided a £3.62 million loan to assist with both the acquisition and development costs of a conversion scheme in Newark-on-Trent.

The 30-month facility was completed within two weeks of planning permission being granted.

The project involves the conversion of a Victorian mill into 39 flats. The interest rate is 0.65% per month and the Loan to Gross Development Value is 69%.

Developers are often forced to seek multiple phases of funding, with an acquisition loan followed by a development facility and then, sometimes, a separate development exit loan.

Each of these phases can incur substantial costs in time and resource, with additional outgoings for legal, valuation and intermediation costs.

Moreover, developers are required to commit to a transaction whilst development funding remains uncertain.

Fiduciam’s facility has provided the borrower with the security of completing the purchase of the property with full works funding already in place.

Fiduciam can offer bespoke terms tailored to a developer’s specific requirements. Terms can be structured to include a reduced rate or an equity release once certain project milestones are achieved, such as when residential planning permission is granted or when practical completion is achieved.

Anastasia Sachinidou, Case Manager at Fiduciam, commented:

“Fiduciam was delighted to provide an emerging developer with a flexible hybrid acquisition-development facility to convert a historic commercial property into much needed new homes.

The facility fully funds the development works and was completed within two weeks of planning permission being achieved.”

Marc Morris, Underwriter at Fiduciam, added:

“Emerging developers need tailored cost-effective facilities that meet their unique project and cashflow requirements while conforming to any timing constraints.

We structured the facility to provide this Midlands-based developer with funds towards the purchase as well as the works, and thus eliminated the need for a costly separate acquisition loan.

Other recent cases have integrated a reduced rate development exit phase once practical completion has been achieved.”