Alternative Bridging Corporation has provided a £1.2m Alternative Overdraft facility to a property developer building two houses in North West London, structured to avoid the staged drawdowns and monitoring costs associated with traditional development finance.
The borrower, a limited company, had acquired a development site with planning permission for two new homes and was looking for a more flexible funding solution. Alternative Bridging secured the facility against three of the borrower's existing buy-to-let investment properties at a blended LTV of 65%.
Rather than releasing funds in tranches tied to site inspections, the facility allows the developer to draw capital as and when required throughout the project. The exit strategy centres on refinancing the two completed properties once construction finishes.
Alternative Bridging's Alternative Overdraft is a flexible drawdown product designed for property professionals. It can be secured by a first charge against commercial or residential property, or a second charge against residential property.
"Not every development project fits neatly within traditional development finance, and this case demonstrates the value of taking a more flexible approach," said Phodis Maratheftis, business development director at Alternative Bridging Corporation (pictured).
"The client had suitable investment properties that could be used as security, which enabled me to structure an Alternative Overdraft giving them access to funding as and when required throughout the development, rather than relying on traditional staged drawdowns.
"For brokers, it highlights why it's important to look beyond the development itself when considering a client's funding requirements. By taking a wider view of the borrower's assets and circumstances, we can often find a funding solution that gives experienced property professionals greater flexibility and control."
If you’re exploring bridging or development finance, get in touch and we can connect you with the right lender.
