A bank offered senior debt of £1 million on the Gross Development Value of £2.4 million. Total costs budget including holding costs was £1.7 million. The developer needed to borrow a further £500,000 to get the project off the ground and we structured a mezzanine loan secured by a second charge to accommodate this requirement.
The flats all sold off plan and both the bank and the mezzanine loans were repaid in 15 months with the developer retaining 78% of the overall profit and achieving a very healthy return on his own cash investment.
