Shawbrook Short Term finance allows for development finance exit

11 December 2017

The “marketing loan” allowed for a large capital raise of c£8m

The Commercial Mortgage Business at Shawbrook recently completed a short-term finance loan structured across three sites (125 units) allowing an investor to exit a high street development finance facility. This is a common purpose for the Shawbrook Short Term product range, often referred to as a “marketing loan” allowing the investor more time to market the property to attract full market value, as opposed to retaining the often more expensive development finance.

Expertly supported by Shawbrook Broker Partner Alburys Property Finance, the structure of this case allowed for a large capital raise of c£8m which was supported due to a blended LTV across the three sites, with full personal guarantees included and a very strong track record on the part of the investor. The combination of these factors gave the Shawbrook underwriting team a great deal of confidence and the case moved to completion less than three weeks from formal offer, well within the customers desired timeframe.

The investors were prior customers of Shawbrook and as such were automatically entitled to the “Existing Customer Discount” which allows for a 0.25% reduction applied to the rate or the arrangement fee. In this case the discount was applied to the rate margin making the overall package more attractive.

Commenting on this completion, Steve Matthews, Shawbrook Regional Development Manager;

“This was a very exciting case to work on with Andrew and the team at Alburys. Having met earlier in the year and explained the benefits of our STL1 product – colloquially dubbed a “marketing loan” - Andrew was able to look at different ways to use the product when speaking to his clients. The client is a prolific developer and was already known to Shawbrook which always underpins our confidence. Having three sites which were either complete or close to completion and with new projects on the horizon, this presented the perfect opportunity for Shawbrook to assist with repaying the development finance and deliver a large capital raise to use on new projects.”

Andrew Stanbury from broker Alburys Property Finance commented;

“I was very impressed with the way Steve really took hold of this deal right from the start. Steve and the Shawbrook underwriting team demonstrated a flexible and innovative approach. This was a highly complex deal consisting of 125 units across 3 schemes. There were many challenges to overcome but with our experience and expertise in these types of transactions, along with Shawbrook’s commitment to deliver, our client was able complete on time.”