CBILS Backed Development Finance Facility

Posted by Positive Commercial Finance on 10th February 2021 -

We helped our client with a CBILS  (Coronavirus Business Interruption Loan Scheme) supported Development Finance facility

CBILS backed Development Finance facility

Deal Structure:

£1.3m facility

58% Loan to Value on Day 1 and 61% Loan to GDV.

Interest Rate 9% per annum (covered by CBILS for 12 months)

2% Arrangement Fee (covered by CBILS)

0.5% Exit Fee (covered by CBILS if redeemed within 12 months)

Professional fees covered by CBILS

15 months term

Deal Summary:

Our contractor/ developer client had owned a site on the South Coast for some time now, and had applied for and successfully achieved planning consent for the demolition of the existing property and new-build of 4 townhouses in what will be a very pleasant gated community.

The clients first-choice Development Finance lender had put his loan application on hold at first Lockdown, which actually turned out to be advantageous, given he already owned the land and was therefore under no time pressures. Soon after Lockdown, a number of Development Finance lenders launched CBILS Development Finance, which applied to such circumstances where an incoming lender had withdrawn due to funding issues or nervousness.

We sourced a CBILS Development Finance option for our client, which involved a “Business Interruption Payment” (BIP) to cover 12 months of interest and all lender levied fees, including the Arrangement Fee, valuation fee and Monitoring Surveyor costs. It will also cover the Exit Fee if the loan is redeemed within 12 months.

The CBILS loan redeemed the existing debt on the site and then covered 100% of the build costs, contingency, professional fees & s106, effectively giving the client 100% of refinance costs and the costs to complete the scheme.

Our experienced developer client is now on site and will enjoy an initial 12 months period where all loan costs are covered by the BIP.