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West One, one of the biggest privately funded short-term lenders in the UK, has been approached by a property developer looking to fund the development of a luxury residential property. The house, based in Esher, Surrey, is at the early stages of development, with the main walls constructed up to first floor level only. All work up until this point has been entirely funded by the borrower.
The developer was seeking a loan worth 37% of the unaltered value of the property (£2,700,000), followed by additional draw-downs subject to re-inspection of the property to assist with the final development of the house.
We felt comfortable working with this borrower, and, within a month, had carried out all the relevant checks and necessary due diligence. West One agreed to arrange a suitable funding facility secured against sale of the property. We lent the borrower £1,000,000 as the first tranche of the loan at a rate of 1.25% a month for a period of 18 months and agreed to release an additional £1,300,000 based on re-inspection of the property.
“We look forward to seeing the finished project!”
“We felt comfortable working with this borrower”
Late 2013, West One were approached by a successful property developer to assist with purchasing a three-storey terraced house in Stoke Newington. The developer had plans to purchase the North London property, worth £835,000, fully refurbish the existing layout and place it back on the market for sale after one year.
The borrower was looking for a loan worth 65% of the unaltered value of the property to help with the purchase. Once all the relevant due diligence and checks were carried out, West One agreed to supply funding to complete the purchase and lent the borrower £536,250 with monthly interest payments of 1%. The 12-month term provided the borrower with enough time to refurbish and sell the property, and subsequently repay the loan.
The loan successfully completed last week. A great start to 2014!
"We had enough time to refurbish then sell the property"
A property developer, which owned a commercial office building in Paddington worth c£5 million had plans to sell the block. Their buyer had decided to convert the building into residential use by splitting each floor into individual flats. As part of the deal, the developer would keep one floor of the building, renovate it and sell it on themselves..
The developer approached West One looking for a loan worth 75% of the unaltered value of the retained property to help fund the refurbishment. Based on all the necessary checks done by our broker and the speed at which our team could act, we were able to work fast and diligently. In the end, West One lent the developer £620,000 secured against the property, for a rate of 1% a month (deducted at the start of the term).
The nine month term of the loan provided the borrower plenty of time to renovate, fully refurbish the flat and place it on the market for sale.
"We fully refurbished the flat and placed it on the market"
West One, the largest privately-funded bridging lender in the UK, has stepped in to fund a loan of almost £1M on a highly unusual property construction after the borrower was let down at the last minute by another lender.
The cutting edge four storey property, built on private land in Putney, South West London and made entirely from a glass and steel frame, was at first fix stage and up to this point had been entirely funded by the borrower.
West One agreed to supply funding for completing the development, on the basis of a first tranche of £500,000 on an LTV of 38% and additional draw-downs as needed subject to re-inspection of the property.
"This was a borrower looking for some creative thinking to fund the completion of his project. Up to this point he had used his own funds to design, plan and construct the property up to watertight stage. For us, it was simply a case of designing a deal that suited both parties; Putney is an excellent area, the property looks stunning and the LTV was very attractive. We built in draw-downs so the client would avoid paying interest on money he was not going to need yet".
The luxury property is expected to be completed within the next 5 months.
"We avoided paying interest on money that was not needed yet"
An experienced property developer in Richmond successfully won an auction bid to purchase a mixed use property in the area and convert it into fully residential use. The client agreed to purchase the property for £3,000,000 and under the terms of the contract had just under two months to complete the acquisition.
Without access to all the necessary funds, the client looked for a short-term financing solution to bridge the capital shortfall. West One was approached by the client’s broker searching for a loan.
We were comfortable working with the borrower, who had carried out similar projects in the past. All the relevant checks and necessary due diligence were carried out and West One lent the borrower £2,100,000 at a rate of 1.20% a month, for a period of 12 months.
The borrower was able to purchase the property within the contractual time and use the 12 month period to arrange a suitable refinancing facility.
"We completed in just 2 months!"
In August 2012, a UK property development company borrowed £1,000,000 from a mainstream lender to purchase a mews house in Fulham, West London and convert it into two new flats. The company had 12 months to repay the loan within which time it expected to convert, fully refurbish and sell the properties. After 10 months, the flats were completed, valued together at £1,750,000 and placed on the market with an estate agent for sale.
Unfortunately, by July 2013 the loan was nearing its termination date but the agent had not yet received any offers that met the company’s asking price for either property. In order to avoid accepting a lower offer or be subject to penalties/ increased interest rates on the outstanding bank debt, the company looked to obtain a new short term financing facility.
West One was approached by the company’s broker looking to source a suitable bridging facility as quickly as possible. Based on the usual application forms and the speed at which we were able to value the properties at and carry out all relevant due diligence, we were able to act fast and efficiently. By August, West One lent the borrower £1,150,000, secured against the two properties, for a period of 9 months at a rate of 0.99% per month. The loan provided funds to repay the existing lender and provided interest for the full term of the new loan. Some monies were also left over to dress the properties in order to assist the sales process.
The company was able to repay the initial loan and had sufficient time to sell the properties at an acceptable price.
"West One acted fast and efficiently"
A BVI company had agreed to buy 3 commercial office buildings in North London at a purchase price of £6,325,000. The buildings were let to multiple tenants, guaranteeing a good return on investment. Under the terms of the contract, completion was required within 2 months. The purchaser did not have sufficient funds at this time so in order to avoid missing a good opportunity, they looked to raise third party debt to finance the acquisition. However, a high street bank wasn’t able to lend within this time frame and so bridging finance was the only possible solution.
The purchaser approached West One in April looking for a short-term loan with no exit fees or early repayment fees. West One recognised the borrower’s business acumen and the good investment this case represented. We agreed terms and provided funds of £3,625,000 for a period of 9 months with 3 months interest pre-paid in advance.
The term would provide the borrower with enough time to refinance the bridging loan with a mainstream lender.
By June the borrower had received the funds, secured against the 3 properties, and completed the purchase.
"We secured a good return on investment with our bridging loan"