Roma Finance fund credit crunch victim to progress new build development and repair credit profile


Case File:

  • Borrowers had a bank halt a major project during the credit crunch in 2008
  • Were successful property developers but needed finance for a new build project of a 3,000 ft2 house
  • Roma Finance provided a £235k bridge over 6 months to release bank charge so project could start
  • Plot of land for new build on the estate worth £250k
  • Cottage in grounds also worth £250K

The credit crunch came quickly and unexpectedly and many experienced property professionals were affected.  Having had a string of successful developments, the bank pulled finance on a major build in 2008 and these borrowers lost a significant amount of money and their credit profile was severely affected.

When Roma Finance met the borrower to review the proposal, they owned an estate comprising a main residential property and a separate cottage sat on over an acre of land. The primary residence was worth £600,000 but this had a mortgage on it of £600,000, a £50,000 second charge and 5 equitable charges on the title.

The plan was to partition the land so that it could be sold with planning for a new 3,000 sq ft house. The building plot with planning permission was worth over £250,000 and the sale of the plot would be used to exit the bridge. Once sold, phase two will be to extend and renovate the cottage so its value could also be maximised.

After fully reviewing the proposal and the opportunity to repay loans and restore the borrower’s credit profile, Roma Finance provided a £235,000 bridge over 6 months to release the second & equitable charges on the property & repay a substantial element of the residential mortgage, allowing Phase 1 of the project to get underway.

Scott Marshall, Lending Director of Roma Finance said: “This case highlights the benefits of the way Roma Finance does business, meeting every borrower and fully understanding their property experience and their plans. Many experienced people were affected by the credit crunch and, through no fault of their own by banks pulling the plug on projects, found themselves with good long term assets but also some debts they found difficult to reconcile. Having worked closely with this borrower, they have demonstrated their experience and we will now back future developments.

“In fact we are already discussing the next project which focuses on extending & renovating the cottage on the estate. This is worth £250,000 now, but valued at £500,000 when refurbishment works are completed, so we are pleased to have turned the situation around for this particular borrower”

James Hardwick of Charleston Financial commented, “We’ve been working with Roma Finance for a while now and this case is yet another example of how they look at deals differently from other bridging lenders.  These were entrepreneurial borrower with a strong background in development.  The case was approved within 24 hours of the Borrower Visit and funds were released 7 days later.  A great service once again.”

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