£1.3m overdraft facility for Cotswolds housebuilder

Alternative Bridging Corporation has announced that it has provided a £1.3m overdraft facility to an established Cotswolds housebuilder, giving it working capital while residential property sales moved towards completion.

The developer needed access to £1m to support its operations after longer-than-expected delays between property reservations and completed sales. Although the properties were reserved, the time transactions took to complete put pressure on the business’s cash flow.

The lender structured the funding through its Alternative Overdraft product, agreeing the facility at 55% LTV for a gross funding amount of £1.3m.

The overdraft facility allowed the borrower to access funds as and when needed rather than drawing the full amount immediately. That gave the housebuilder more control over its borrowing and kept enough working capital available between agreed sales and completion.

The transaction was led by director and chief commercial officer Jonathan Rubins, supported by Mihaela Janko, manager of the case management team, and Hannah Scheuber, senior underwriter. Close communication between the lending and legal teams helped the transaction progress efficiently, and the team answered queries promptly throughout. The overdraft facility completed, allowing the developer to keep operating while it waited for its residential sales to complete.

“One of the challenges facing housebuilders is that a successful sale doesn’t necessarily translate into immediate cash flow,” said Rubins (pictured). “A property can be reserved, the buyer can be committed, and yet the developer may still have to wait weeks or months before those funds actually arrive.

“That gap can put unnecessary pressure on an otherwise healthy business, particularly when capital is needed to keep existing projects moving. It’s also why the structure of the funding is just as important as the amount available.

“An overdraft facility gives borrowers the ability to access capital when they need it, without having to take on the full borrowing from day one. As lenders, we need to understand how a business operates and where the pressure points are, rather than assuming that every short-term funding requirement calls for the same solution.”