Our property developer client had the opportunity to buy a property in need of substantial refurbishment, carry out the improvement works, and sell it on for a healthy profit.
But he didn’t have enough capital to fund the total purchase cost, and the building works. They approached a bank for finance but were turned down.
We took the case to a specialist lender we have a strong working relationship with.
Definitions for refurbishment lending can vary from one institution to another.
This lender initially classed the remedial works as a heavy refurbishment, but with some persuasion from us about the interpretation of their criteria, they were prepared to re-classify the work as a light refurbishment.
Lending for light refurbishment is charged at a lower rate (reflecting the lower risk to a lender).
We were able to quickly raise £262,000 to contribute towards the purchase of the property, plus 100% of the projected refurbishment costs of £88,000.
Our client was able to complete the purchase and get the works underway.
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