Our client required £1.05m to build 4 terraced houses and 2 semi-detached houses (Phase 1) and 8 terraced houses and 2 semi-detached houses (Phase 2) in East Kilbride, Scotland.
The problem: our client required development finance but could not obtain bank funding to do so. The client was introduced to Seneca for a dependable solution.
The merit: the sites had planning permission and some plots were pre-sold. Our client was confident of being able to sell the remainder of the properties off-plan. Our client had delivered projects of similar size and complexity before and had an excellent working knowledge of the local property market in East Kilbride. The surrounding area was also subject to development by larger housebuilders including CALA Homes.
Our solution: a £1.05m facility for 9 months with interest rolled up to the end of the term of the loan to ease cashflow. The sale proceeds of each plot were to be used in the reduction of the facility.
Some issues along the way: our client experienced difficulties in connection with the status and build of a new road which caused some delay. Our client informed us immediately and kept us up to date as steps were being taken to resolve the problem. Our client also made us aware of some delays in the build of Phase 2 and Seneca worked with the client to help manage this delay.
The result and exit: our client completed the project despite over-running the original 9 month term and all 16 plots were sold as planned. The properties, newly built roads and communal areas were all finished to an exceptional standard.
The client commented:
“As a property developer, I feel that it is important that I deal directly with a company that understands the market. In dealing with Seneca, not only have I had access to their property team but also their decision makers. Their dynamic approach means a quick response to my cashflow requirements throughout my projects from conception to completion. Seneca have worked with me and supported me when things haven’t always gone to plan.”
Despite our client experiencing difficulties and delay in the project above, Seneca is currently working with this client on another purchase and development project involving the build of 14 new apartments in Glasgow.