A peak debt facility is a form of revolving credit facility (referred to as an RCF) which allows for monthly drawdowns and repayments, up to an agreed limit, over a set duration.
These facilities are typically used to finance the development of residential housing, across one or more construction sites, in which the developer expects plans to split the site into multiple phases, giving a rolling construction and sales programme across the development.
Once the developer’s equity is fully utilised, the facility can be drawn to finance construction costs on the initial units of the development. As the first units are completed and sold, the sales proceeds can be recycled and used to fund the construction costs of the subsequent phases. Then, when the development reaches its final phases, sales proceeds are used to repay the outstanding balance on the facility.
This is a different approach to traditional development finance, and it allows property developers to recycle their equity during the course of the project, which can decrease the amount of finance required and the cost of borrowing.
London Wall offers bridging loans and development loans to new and existing clients. We have expertise in lending against residential properties and commercial properties. Our loans are classified as unregulated and therefore the property being offered as security must not be your place of residence.