Background – From planning to a new development opportunity
Nick Ridgway acquired a property which he bought for cash and then set about gaining planning permission for a housing development project. After a 12 month period, he eventually got planning for the construction of 9 units and subsequently started finalising his plans for the project.
Challenges – When the bank refused to fund the build
He initially went to see his own bank who he had known for a number of years and had successfully completed previous projects with, to say that he was looking for funding for the development. They initially indicated to him that this would not be a problem, so he started working on the site by using his own cash to start the development. After a period of some time, and having had no feedback from the bank he chased them again only to discover that the bank announced they were not prepared to advance the funds due to their internal restrictions on development finance. This left Nick in a very difficult situation in that he had committed himself to the project and used most of his cash resources.
Solution – ASC steps in to secure full funding
He therefore took the opportunity to meet up with our ASC Essex Regional Director to discuss the situation. He reviewed the development plan and looked at his cash flow and requirements and was impressed with the information provided to him. He also delved into Nick’s experience and was satisfied that this was a sound financial project and was confident that he would have lenders who would be keen to back the project. As a result, Nick instructed ASC to help him put the funding in place and Steve set about the task with a clear timetable from Nick that the matter had now become urgent.
We therefore approached a number of development finance lenders and eventually decided on one of his main contacts to look at the project. The lender was very impressed with what he saw and within a fairly short timetable confirmed that they were prepared to advance 100% of the development costs, together with an interest roll up for a 12 month facility for him to finish the site and arrange the necessary sales. The legals as always took a little time to complete but after pushing from both Nick and ASC, they were able to complete the transaction within 6 weeks of their original meeting.
Outcome – Project back on track and lessons learned
Nick was mightily relieved when the funding was released and has been working on the site non-stop to get it completed during the summer period so he can start the sales process as soon as possible. He commented “I severely regret only speaking to my own bank when I initially needed the finance and as a result, their overall lending attitude gave me a lot of stress which if I had gone direct to ASC I would not have had. I would therefore recommend other clients in this situation to look at all the options first and speak to ASC Finance and use their experience of the sector to ensure they get the best deal available”.
