Arc & Co. has partnered with LBB to support a repeat LBB client – an SME developer based in Huddersfield – with a new ground-up development just outside Manchester, in Ashton.
The client turned to Corey Dennis (pictured left), senior broker at specialist debt and equity advisory Arc & Co., for guidance on how to structure the facility to maximise the net loan.
The development involved three detached two-storey houses, and technicalities around an additional land parcel meant careful structuring was required.
Dennis ensured the legal elements were handled correctly, unlocking the full value of the site.
The result was a £1.12m loan against a gross-development-value (GDV) of £1.6m – representing 70% loan-to-gross-development-value (LTGDV) and 84% loan-to-cost (LTC), stretching the lender’s usual parameters.
With a rate of 9% per annum over 12 months, and the added advantage of a local business development manager (BDM) able to meet the client on site, the borrower secured a facility.
Alongside the finance arrangement, the developer required a new-build structural warranty with a £900,000 sum insured.
Although he had already obtained a direct warranty quote, Oliver Smith (pictured right), senior consultant at LBB, secured a more competitive premium – below the typical 1% of build costs, payable over 12 months – a structure not usually available when going direct.
Smith also arranged for the client’s preferred surveyors to be accepted.
Later, when the lender required multiple indemnity policies as a funding condition, Smith consolidated four separate covers into a single policy.
