Member Article

Roma Finance fund credit crunch victim's property project

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 clients lost a significant amount of money and their credit profile was severely affected.

When Roma Finance met the client 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 ft2 house. The building plot with planning permission is worth over £250,000 and this would be used to exit the bridge. Once this was completed, phase two will be to renovate the cottage so it could be sold to generate further profit.

After fully reviewing the client, the proposal and the opportunity to repay loans and restore the client’s credit profile, Roma Finance provided a £235,000 bridge over 6 months to release a the charges on the property, allowing 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 client and fully understanding their property experience and the plans they have for their development project. 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 client, they have demonstrated their experience and we will now back future developments.

“In fact we are already discussing the next project which focuses on 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 client.”

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 clients with a strong background in development. The case was approved within 24 hours of the Client Visit and funds were released 7 days later. A great service once again.”

This was posted in Bdaily's Members' News section by Ron Bell .