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INTERIM LENDING CRITERIA in Response to the Coronavirus Pandemic Blackfinch Property remains very much open for new business. As part of maintaining the highest levels of service for borrowers we have implemented alternative working arrangements. The situation remains extremely fluid and is likely to change further, but below we set out the interim steps we are taking with immediate effect on new lending proposals. Due to the economic slowdown we are factoring in additional stress tests on both bridging and development loans to account for possible sales and construction delays. In effect, these interim criteria will reduce our loan to value ratios (LTVs) to allow for these additional contingencies as follows: BRIDGING LOANS We are working with a preference for loans with underlying income or income potential. These could include completed developments, or loans with a predetermined exit. i) Where there is underlying income, maximum LTV 65% ii) Where the property is deemed to have strong income potential, maximum LTV 60% iii) Otherwise, maximum LTV 55% The maximum LTVs above will be calculated after having applied a contingency of a further sales delay of six months (reduced to three months if the exit is deemed secure). DEVELOPMENT LOANS i) If a fixed price design and build JCT contract (joint contracts tribunal) is in place with a reputable construction firm and the borrower has a healthy level of net assets for a personal guarantee or cost overruns, maximum LTV 70% ii) If the borrower is project managing sub- contractors or has a weak net asset position, maximum LTV 65% The maximum LTVs above will be calculated after having applied contingencies of: i) A nine-month delay to achieving practical completion on construction; and ii) A further sales delay of six months (reduced to three months if there is deemed to be a secure exit).
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DEVELOPMENT LOANS BRIDGING LOANS...BRIDGING LOANS We are working with a preference for loans with underlying income or income potential. These could include completed developments,

Jun 07, 2020

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Page 1: DEVELOPMENT LOANS BRIDGING LOANS...BRIDGING LOANS We are working with a preference for loans with underlying income or income potential. These could include completed developments,

INTERIM LENDING CRITERIA in Response to the Coronavirus Pandemic

Blackfinch Property remains very much open for new business. As part of maintaining the highest levels

of service for borrowers we have implemented alternative working arrangements. The situation remains

extremely fluid and is likely to change further, but below we set out the interim steps we are taking with

immediate effect on new lending proposals.

Due to the economic slowdown we are factoring in additional stress tests on both bridging and

development loans to account for possible sales and construction delays.

In effect, these interim criteria will reduce our loan to value ratios (LTVs) to allow for these additional

contingencies as follows:

BRIDGING LOANS

We are working with a preference for loans

with underlying income or income potential.

These could include completed developments,

or loans with a predetermined exit.

i) Where there is underlying income,

maximum LTV 65%

ii) Where the property is deemed to have

strong income potential,

maximum LTV 60%

iii) Otherwise,

maximum LTV 55%

The maximum LTVs above will be calculated

after having applied a contingency of a further

sales delay of six months (reduced to three

months if the exit is deemed secure).

DEVELOPMENT LOANS

i) If a fixed price design and build JCT contract

(joint contracts tribunal) is in place with a

reputable construction firm and the borrower

has a healthy level of net assets for a personal

guarantee or cost overruns,

maximum LTV 70%

ii) If the borrower is project managing sub-

contractors or has a weak net asset position,

maximum LTV 65%

The maximum LTVs above will be calculated

after having applied contingencies of:

i) A nine-month delay to achieving practical

completion on construction; and

ii) A further sales delay of six months

(reduced to three months if there is

deemed to be a secure exit).

Page 2: DEVELOPMENT LOANS BRIDGING LOANS...BRIDGING LOANS We are working with a preference for loans with underlying income or income potential. These could include completed developments,

BLACKFINCH PROPERTY IS THE TRADING NAME OF ORIGIN INVESTMENTS LTD (REG NO 05598455)

LYELL TRADING LTD (REG NO 08747022) AND HENSLOW TRADING LTD (REG NO 08703770)

Our expert team is here to support borrowers. Where sites are still open we are encouraging as

much progress as possible (as allowed by Government guidance) and are supporting developers

with advance payments or short term cashflow. We will continue to monitor the situation and our

borrowers’ positions and if construction sites are halted for extended periods of time we will consider

all options in how we can help. To get in touch with the team, use the contact details below.

As part of supporting you throughout this period, we now have a dedicated section on our website

covering coronavirus. This includes enterprise-wide FAQs along with focused updates.

INHERITANCE TAX RELIEF ENTERPRISE INVESTMENT

SCHEMES

AIM MODEL PORTFOLIOS

CONTACT US

01452 717989

www.blackfinch.com/property

[email protected]

BLACKFINCH PROPERTY IS THE TRADING NAME OF ORIGIN INVESTMENTS LTD (REG NO 05598455)

LYELL TRADING LTD (REG NO 08747022) AND HENSLOW TRADING LTD (REG NO 08703770)

INTERIM LENDING CRITERIA

These changes will be applied at our discretion and are based on a judgement of the overall risk.

They will temporarily take precedence but otherwise our normal criteria (attached) remains unchanged.

ONGOING SUPPORT