Development finance for an incomplete project



I was recently able to help a client secure development finance for a project that had been lying unfinished for several years. In addition to running her own business, my client was an experienced residential developer and had a number of valuable assets. Unfortunately, a change in her circumstances meant she had an unfinished project and needed to secure development finance to finish this.

My client had never previously attempted to secure development finance for her projects because she was in the unusual position of funding them entirely from her extensive savings. Her business had been hit by the recession and she was unable to finish her most recent development. She had already purchased the plot and spent £400,000 on building—but she was then left unable to complete and sell the development on.

This was a challenging case because, although she was an experienced developer, she had essentially been doing this on a cash basis and did not therefore have a track record of development borrowing.

Many development lenders don’t like to step in to a project midway through completion. Such lenders like to see that a developer has the ability to forward plan and secure an exit strategy by ensuring they have the facilities to finish the projects they’ve started. This was unfortunate, as although my client had an excellent track record of successful developments, the particulars of this case meant it was difficult to find a specialist lender to work with her. My client’s project had also now been ongoing for five years, so this situation needed to be resolved quickly.


I knew this would require a specialist lender. Fortunately, Enness has an extensive panel of lenders and access to exclusive products so I was able to secure my client a development loan as opposed to a bridge.

The gross development value of the plot was £2.84million, and she needed another £450,000 to finish the development and begin the process of selling it on. I was able to secure her a first charge loan over the original £400,000 and also secure her the additional funds she needed to finish the product. The rate for this was 8.5% a year, which may seem high—however, securing a development loan for this sort of case is extremely unusual, and this solution meant she was able to sell on the development and make a profit.



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