Tight deadlines, non consented land and directors in far flung regions of the globe were only a few of the obstacles which Castlehill Capital had to overcome to get this bridging loan completed.
Our clients had been left exposed when a proposed funder had to entirely reneged on their proposed offer of finance due to internal changes at the company. This left the client with a deadline of 7 days to arrange payment of circa £900k to Plymouth Council or lose the the site.
The client had already committed in excess of £100k to the site in planning fees. Spent on progressing their application for full consent for 99 residential units that would qualify for the Starter Homes scheme in England (https://www.ownyourhome.gov.uk/scheme/starter-homes/).
Therefore, it was imperative that client was able to secure the site and then move onto the next phase of concluding the planning consents and ultimately developing the site to completion.
The majority of lenders will not accept land without full planning as security or if they do they will not exceed a maximum of 50% LTV. However, Castlehill Capital immediately understood the commercial viability of the scheme and the inherent value of the site. Bridging loan terms of 65% LTV were quickly offered and accepted. This was the easy part.
With the clock ticking, Castehill Capital had to then arrange a speedy valuation and instruct legals. Fortunately, the client’s solicitor had already completed the Report on Title and had much of the legal documentation ready and waiting. What was no so serendipitous was one of the directors of the borrowing entity had recently left for a extended vacation travelling around the highlands of India.
Normally each director is required to meet in person with the Asset Manager and sign security, provide KYC & PG docs – however in the extreme circumstances we took PGs from the other 2 directors and provided a clause for the remaining to director to provide his PG post completion.
The loan did eventually slip 1 day past its completion date but we were able to communicate directly with the council counterpart on behalf of our client. The loan was duly completed the next day and we now move onto the next phase which is providing a the £10m facility to enable the client to build the site out.