Choose Your Broker Wisely!
An example of why to use a broker, like ourselves, who specialise in development finance!
Last week we completed on a development loan for the construction of eights apartments in Lancashire. We were approached by the client as they had recently completed on this development site through another broker and were very unhappy with the outcome.
The client had advised to the original broker that they needed an initial net drawdown to allow them to complete the groundworks and get the slab down but when the deal completed the client was only left with circa £2,000 when they were expecting significantly more. This was as a result of fees, interest and other costs being deducted from the initial drawdown which the client thought was being ADDED to the initial drawdown, NOT deducted! They therefore ended up with a site that was previously unencumbered, now subject to a charge and insufficient funds to get the project to the next drawdown.
This was a result of the other broker not explaining the terms of the funding to the client and the client assuming that the broker was doing as instructed.
It is very important that brokers go through the lender’s terms in detail before allowing a client to sign them and understand their clients’ requirements fully to avoid these unnecessary and very costly mistakes.
We now have a very happy client with our outcome.