Our client was coming to the end of their 4th development project; two semi-detached properties, both had undergone a full refurbishment. The current lender wanted to be redeemed and was charging an extremely high-interest rate on the loan. The client came to us via a referral asking to look at redemption options. High leverage was needed.

Location: Surrey

Loan Type: Bridging LoanDeveloper Exit

Loan Size: £1.55m

Loan-to-Value: 75% (NET)

The Situation:

The properties were finished and ready to go on the market, but the existing lender was not prepared to wait for the sale. Their interest rate was so high that had they remained in the deal, then any profits our client stood to make would have been eroded by the lenders astronomical interest charges.

We needed to exit the loan immediately to preserve profit for our client and make sure her hard work was rewarded.

The Challenge:

The main challenge we faced on this case was the high leverage. We had to take both a first charge and a second charge bridge, with 2x different lenders to get to the redemption figure needed.

Using two lenders on any case adds extra work and takes more time; 2x valuation reports, 2x lender credit committees, and 2x solicitors.

All of this needed to be done against the backdrop of an aggressive lender wanting redemption, and the high, daily interest charges.

The Outcome:

Through the strong relationships we had with both lenders, we were able to get them to work together on a deal for the first time.

We were able to negotiate a fixed redemption with the existing lender, which meant that the loan could be redeemed. Without this agreement, then the properties would have been put into receivership and the client would have lost control of the deal.

We managed to deal with 3x lenders, 4x solicitors and get to completion, all within 3 weeks. An incredible feat. We also managed to substantially reduce the monthly interest charges, so that our client should hopefully still walk away with a decent profit.

Client testimonial:

“The team at PFG did a great job for us with a recent refinance. It was complicated and involved multiple parties and various legal advisors. PFG kept the momentum up even over the Christmas period and saw the difficult deal through to completion. 

I wouldn’t hesitate in recommending PFG to anyone who needs specialist finance. They’re diligent, they listen, they’re proactive and they get the job done. “

Gemma Zimmerhansl, RGZ Properties

Lender testimonial:

The team at PFG were highly involved throughout the execution of this complex development exit loan. They facilitated communication between all parties, making sure that everyone was working together in order to hit tight deadlines. They showed great understanding of the needs and requirements of the lenders and solicitors involved, all while ensuring the best deal for their client. It was a pleasure to work with PFG on this case and we’re looking forward to working closely with them again in the future.

Funding 365