£1.4m Ground-Up Development Loan for Four New Homes

Momenta Finance is delighted to have completed a ground-up development loan for four new-build dwellings in Borrowash, Derby. The borrower already owns the land unencumbered, and required the full build costs to complete the development.

The Property

Our security comprised of the former rear gardens of the development site. The Borrower owns and rent out the existing houses. Upon acquisition of the existing houses, the Borrower severed the rear gardens to create the development site.

The borrower has planning permission for the erection of 4 detached dwellings and a detached double garage.

Borrowashis a village in the Erewash district of Derbyshire, and is a busy commuter centre for Nottingham and Derby and lies on the busy old road between the two cities.

The Borrower

The borrowing entity is a special purpose vehicle (“SPV”) established for this development. The principle of the SPV is an experienced developer and landlord with a strong record in renovations and extensions.

The borrower demonstrated the experience and credibility required for this type of structured facility, with previous developments by the borrower having shown a strong track-record, a robust build schedule, and a clear exit via the sales of each unit.

The Solution

Momenta Financer provided a £1.467m facility over an 18-month term, with a day-one draw of £200,000 to start the works on the ground-up development, with a further £1.267m being drawn in tranches to complete the build. The facility was within Momenta’s maximum of 70% LTGDV, with the day-one being comfortably within Momenta’s maximum leverage offering.

This transaction showcases Momenta’s ability to deliver structured finance solutions for ground-up development, helping maximise developer’s projects and complete these projects without undue time pressures.