Tuscan Capital has completed a £3.7 million development exit loan facility for a holiday let scheme in Devon.
The client, an experienced developer, had obtained planning permission to demolish a former hotel and develop 15 flats on the site in a commanding prime position on the seafront in Hope Cove, an Area of Outstanding Natural Beauty (AONB) near Salcombe, South Devon.
The broker, Ed Wylie of Forecast Finance, contacted Tuscan Capital as they had worked together previously and was therefore confident, they could operate within the client’s tight timeframes.
The security consisted of nine units with restricted holiday let use, as well as a manager’s flat within a newly developed three-storey building overlooking the cove. The development also included five residential flats which did not form part of the security and were sold off on long leasehold titles.
Tuscan Capital provided a £3.7 million gross loan on a property value of £5.4 million at a Loan to Value (LTV) of 70%. The funds were used to clear the current development finance facility, with the excess to pay off the client’s business partner.
Tuscan Capital provides non-regulated bridging finance to the residential, commercial, semi-commercial, HMO and mixed-use real estate sectors in England and Wales.
Colin Sanders, CEO at Tuscan Capital, said: “This was a particularly interesting deal for Tuscan Capital as the property is a newly developed multi-unit holiday let in a prime location in Devon with spectacular sea views.
“We could see that the business model was viable and that the ultimate exit for our facility was going to be a commercial term re-finance which was realistic and only a matter of time for the client to establish the revenue streams.
“Our loan enabled the borrower to repay the development facility before its expiry and repay an investor; a ‘win-win’ for all involved.”
Wylie, specialist finance director at Forecast Finance, added: “Forecast Finance were delighted with the service of Tuscan Capital; however, this should come as no surprise. When you have an urgent deadline with many moving parts, you need a lender that not only understands the transaction and its complexities but can come up with practical solutions should a hurdle arise.
“The service was brilliant, and all involved in the transaction really pulled it out the bag for the client. A special thanks to Ed Parsons, Andy Reeder, and Dena Thompson.”
