100% Funded Land with a Bridging Finance

An established developer client of ours was set to complete the purchase of a land parcel, which they had secured under a subject-to-planning option after nearly two years of planning efforts. As the seller was no longer willing to extend the agreement, the client faced the urgent challenge of securing the necessary funds to finalise the acquisition.

 

The developer was constrained financially, having already invested a £100,000 deposit. With the seller threatening to serve notice, which would jeopardise the client’s two years of planning and development efforts, the stakes were high. The total purchase price for the land stood at £1.2 million, with £1.1 million still due and additional costs for Stamp Duty Land Tax (SDLT) and legal fees impending.

 

Our Solution

Understanding the unique value of the property and the significant efforts already invested by the client, we identified a financing solution that leveraged the enhanced planning value of the land. We secured a lender who was willing to provide a loan based not on the original purchase price, but on 60% of the new, higher value attributed to the land post-planning approval. This approach allowed for a higher loan-to-value (LTV) ratio than typical, addressing the client’s funding gap comprehensively.


 

The Outcome

We facilitated a £1.2 million net bridging loan for the client, with interest rolled over for 12 months at a competitive rate of 1% per month. This financing solution not only enabled the client to cover the remaining purchase price but also the associated stamp duty and legal costs. The loan was arranged and completed in just over three weeks, ensuring that the client could swiftly secure ownership of the land and safeguard their planning gains without further delay.

This highlights our capability to craft bespoke financing solutions that are precisely tailored to the unique circumstances and urgent needs of our clients, ensuring their projects proceed without disruption.