Alternative Bridging Corporation has provided a £1.3 million overdraft facility to a residential development company based in the Cotswolds. The funding is designed to offset temporary liquidity pressures resulting from timing delays between property reservations and formal sales completions.
The credit facility was structured with a loan-to-value ratio of 55 per cent. A key feature of the agreement is its operational flexibility: the developer is entitled to draw down funds as and when required, rather than being obliged to draw the full sum immediately.
Tailored liquidity management amid transaction delays
For developers, the interval between the binding reservation of a property and final legal completion represents a sensitive phase in the project cycle. While formal completions remain pending, finishing works or preparatory measures for subsequent projects continuously tie up liquid capital.
Structured as a revolving facility or overdraft line, interest charges are incurred exclusively on the amounts actually drawn. This enables the company to service short-term liabilities without bearing the interest costs of a traditional term loan across the entire facility amount.
Key terms of the financing structure
- —Financing volume of £1.3 million provided by Alternative Bridging Corporation
- —Conservative loan-to-value ratio of 55 per cent
- —Tranche-based drawdowns aligned with current liquidity requirements
- —Bridging of timing gaps between reservation and legal property transfer
With a loan-to-value ratio of 55 per cent, Alternative Bridging Corporation's commitment reflects a defensive risk profile. For the Cotswolds developer, the facility provides the necessary headroom to bring the sales process to an orderly conclusion without making hasty price concessions.
Specialist lenders fill a gap with such financing structures when standardised bank loans lack the flexibility required to accommodate fluctuating cash outflows. The developer's liquidity remains secure until the expected sales proceeds have been received in full.
