Our client Millennium Enterprises Ltd is a property development company currently working on a site in the picturesque village of Ironbridge in Shropshire.
The client had previously done business with Finance 4 Business when we provided the development finance for the construction of five houses in the car park of The Crown public house, which our client also owns. This development consisted of four semi-detached houses and one detached house. All the houses were three-bedroomed properties.
Our client wanted to convert the existing public house into apartments. To undertake the development, additional funds were required. As the existing properties had yet to be completed and sold, this was going to be a challenge.
The outstanding development debt stood at £593,775. An additional funding of £225,000 was required to complete the conversion of the pub into apartments. Planning had been arranged for this and the client had been granted change of use.
- Councils urged to protect pubs from PD rights
- Major pub portfolio acquisition to be investigated
- Davenports Brewery to restore historic pub
- Pay off existing development debt
- Raise additional funds for conversion of the public house
- Existing development is yet to be completed
- None of the new builds have been sold.
The existing development of five houses had a market value of £1.35m. Our client needed the additional funds to convert the pub and had substantial equity in the new development to undertake the work. With our extensive knowledge of the market, we utilised a development exit product through Interbay to pay off the existing finance and release additional funds.
This resulted in:
- A net debt of £904,500 equating to 67% LTV
- The exit strategy to redeem the new debt would be the sale of the new builds.
This is an excellent example of an existing client relationships. By initially sourcing the development finance, Finance 4 Business was able to redeem this debt and release additional funds for the next stage of development before the sale of the newly built properties.