Crystal and Affirmative in explosive development finance project


A brownfield site development project in Manchester has proven to be a highly explosive proposition after the developer found a live World War 2 bomb being used as a doorstop.

The deal – which was sourced through Crystal Specialist Finance (CSF) and funded by Manchester-based lender Affirmative – required the removal of a number of dilapidated buildings prior to the construction of new residential houses. A visit from the bomb squad ensured this task was not completed in seconds.

But the 300mm long by 150mm diameter bomb was only one of a barrage of problems faced by KAD Developments, with the deal taking over two years to complete.

CSF first became involved in June 2017 after the applicant was let down by another lender. Due to initial limited funds a deal was negotiated with the landowner to defer part of the payment until completion, but having approached several lenders a lack of experience and upfront payment proved problematic.

A few months later the client provided additional security to offer comfort to any prospective lender and Affirmative agreed to offer the balance of funds day one (£240k) and 100% of the build costs to be funded in arrears (£60k).

During the legal process the seller reneged on the deal which again placed it all on hold but in November 2018 an equity partner agreed to make up the shortfall. Affirmative agreed to honour the original offer and use the existing valuation with the funds finally released in April 2019.

A World War 2 bomb aside the new development is on track, with a local estate agency valuing the new houses above the initial £1.5m GDV given by the valuer.

Michael Fisher, head of development finance at CSF, said:

“This application encountered a minefield of issues, but by working together and continuing open dialogue we were able to assist the client through every setback to ensure he could complete the deal.”

Karl Daniels of KAD Developments continued:

“Wow, what can I say, I spoke to Michael at Crystal nearly everyday for two years while he and his team completed a deal on the site, I will definitely be using them again.”

Affirmative’s Head of Sales, Ian Harrison added:

“It’s not the type of loan you see every day, but we love it when quirky cases like this come across our desks. It was a pleasure working with Crystal to get the customer the deal they needed, and we look forward to working with them in the future to help other customers with a flexible lending solution.”