Structured Funding Solution for Mixed Development and Investment Assets.

The Requirement:

Our client owned an entire parade and needed two separate facilities for different parts of the site:

• A development facility to fund the conversion of an existing garage into two self-contained residential units.
• A long-term investment facility against an already converted block of 5 self-contained flats.

The transaction also needed to dovetail with the incumbent lender, who was retaining part of the site and putting in place a new long-term facility of their own. All facilities needed to complete on the same day, adding a further layer of complexity.

About The Property:

The security comprised two distinct elements within a larger parade:

• Development element – £350,000 facility:
  – Conversion of an existing garage into two self-contained residential units.
  – The garage formed part of the former rear areas of a bank branch, now being repurposed for residential use.
  
• Investment element – £940,000 facility:
  – An already converted block of 5 self-contained flats.
  – The requirement here was purely long-term investment funding, with no development works required.

There was also an offshore element within the borrowing structure, which narrowed the lender pool and increased documentary and structuring requirements.

How we helped:

We designed and coordinated a funding solution that worked both for the client and alongside the incumbent lender’s requirements:

• Sourced a single lender willing to:
  – Provide a development facility for the garage-to-residential conversion.
  – Provide a separate long-term investment facility for the 5 flats.
  – Lend to two different borrowing entities, including an offshore element, with appropriate documentation and structuring.
• Worked closely with the incumbent lender to ensure the overall parade was split and refinanced correctly:
  – Part of the site was retained by the incumbent lender, who put a new long-term facility in place for their portion.
  – Our two new facilities were structured to sit alongside this, with clear security demarcation.
• Managed the process so that all facilities completed on the same day, meeting the incumbent lender’s conditions and avoiding any break in the client’s overall funding position.

The Outcome:

We successfully:

• Secured a £350k development facility to fund the conversion of the former garage into two new self-contained residential units.
• Secured a £940k long-term investment facility against the already converted 5 self-contained flats.
• Delivered both loans with the same lender for ease of management, despite involving two separate borrowing entities and offshore structuring.
• Coordinated with the incumbent lender so that all facilities completed simultaneously, satisfying their requirements and providing the client with a clean, fully funded structure across the wider parade.