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The Client’s Initial Challenge
Following the demolition of barns previously approved for Class Q conversions, the client had already invested around £350,000 into site works – including demolition, clearance, footings, services, and a partial build – on a project of three new-build houses.
Despite the strong GDV of £2 million, the borrowers faced a significant hurdle: a £300,000 deferred purchase price still outstanding on the site acquisition. Without a creative funding structure, completing the project was looking like it would fall through.
The Magnet Capital Approach
Magnet Capital provided a £1.16m facility, including a £245,966 day-one drawdown. The funding was structured to take account of the £300,000 deferred purchase price, allowing it to be settled later from the eventual unit sales once Magnet Capital had been repaid.
By structuring the deal in this way, we unlocked the development’s potential while ensuring the borrowers could press ahead with the build.
The Power of Partnership
The result was a flexible and well-structured finance package that gave the client the breathing space to move forward. With the funding in place, all three plots are on track to be watertight by September/October 2025, with the full term of 12 months covering both build and sales.
By working closely with the clients and tailoring the facility to their needs, we made sure the project could be delivered successfully.
“This project really sums up why specialist lenders add so much value to the market. We were approached with an extremely complex structure and purchase. There are very few lenders that could have pulled this off, but challenges don’t phase us at Magnet Capital, and we were delighted to get the deal over the line in good time.”
