Location - North West London
Loan Type - Term Loan
LGTDV - 65%
Loan Amount - £1,200,000
The Alternative Overdraft provides a flexible drawdown facility that can be used for a number of different purposes, and it’s increasingly being harnessed by developers to finance their plans.
In this particular case, the borrower was a limited company that was used to deliver development projects.
The client wanted access to finance on a flexible basis in order to fund future schemes and was keen to avoid traditional development finance, which is often provided as staged payments, usually carries higher rates and has additional associated costs, such as site inspections.
They had already purchased a site for development and had recently received planning approval to build two houses. The next step was to start construction and the borrower wanted flexible funding that would enable them to draw funds as and when they were needed, without the hassle and additional cost of a monitoring surveyor having to visit the site whenever they wanted to draw upon the facility.
The Alternative Overdraft perfectly suited the client’s requirements, and we were able to provide the finance they needed with a loan that was secured across three unencumbered buys to let investment properties at 70% LTV. The client’s exit strategy was a refinance of the two houses once construction had been completed.
This is just one example of how the Alternative Overdraft can be used by borrowers who require a fast, flexible way to access funding when they need it. It can be secured by first charge over commercial or residential and second charge over residential properties, and loans are available from £250,000 to £3m.
As with this case, the Alternative Overdraft is best secured by first charge on under-utilised property assets.
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