The borrower — a client of London-based debt advisory business Mantra Capital — had taken out a bridging loan to acquire two derelict neighbouring Hertfordshire-based properties with the intention of turning them into flats.
But when the initial attempt at planning permission was rejected, the client was unable to secure the development finance required to pay off the bridging loan before it expired. Rather than extend the bridge, the lender called it in leaving the client in a difficult position.
When Mantra Capital was let down with little time to spare by a second lender, Octane Capital was approached and its risk team rapidly looked at the underlying assets, location and borrower.
Octane concluded that, even if planning permission for flats was again rejected, the properties could be refurbished and sold at a comfortable profit. To this end, it provided a £1m bridging facility at 60% LTV.
Octane Capital released the funds within just four working days of the original enquiry by Mantra Capital. To meet the pressing deadline, it worked with long-term partners, De Villiers Chartered Surveyors and solicitors Howard Kennedy.
Rickesh Patel, Senior Commercial Relationship Manager, Mantra Capital, said:
“We have known Mark and the team for a number of years so when the lender we had lined up withdrew at the last minute, Octane naturally received the first call. With all their experience, the Octane team are able to look at a loan in a way that many other lenders cannot. Rather than take an application at surface value, they dig below the surface where the level of risk is often far less than it appears, and can take a commercial view accordingly.”
Mark Posniak, Managing Director, Octane Capital, added:
“When we looked under the bonnet, this loan was never in doubt. The borrower was robust and the asset risk minimal. The speed with which we managed to get it over the line, working alongside companies with the pedigree of Mantra, De Villiers and Howard Kennedy, was particularly satisfying. When deadlines are tight, experience counts and in this case all the companies involved had it by the bucket load.”
