Shawbrook Short Term finance allows for development finance exit

Michael Lloyd

December 12, 2017

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The commercial mortgage team at Shawbrook has completed a short-term finance loan structured across three sites (125 units) in less than three weeks, allowing an investor to exit a high street development finance facility.

Using their short-term product range, often referred to as a ‘marketing loan’, gave the investor more time to market the property to attract full market value, as opposed to retaining the often more expensive development finance.

Supported by Shawbrook broker partner Alburys Property Finance, the case allowed for a large capital raise of c£8m, 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 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.

Steve Matthews, Shawbrook regional development manager, said: “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, added: “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.

“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.”

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