A £5m development loan has been provided by Fiduciam for the construction of a £10m seven-storey residential apartment building in Manchester.

The building will contain 38 apartments with ground floor retail.

Henry Fisher, of Fiduciam, said: "This was a deal that other lenders were unwilling to lend on because of its complexity, however we work with small and medium-sized businesses and developers every day and as a result we get to truly understand their business models and the risks associated with different developments. This means that we can do more than just lend them the money, in fact we can also help to guide them through the process.  As a result, we were able to put together a financing package to meet the needs of the developer and enable the development to progress successfully."

The site has a complicated property title, with freehold interests held by the local council and title restrictions imposed by Homes England. The title restrictions culminated in an overage agreement stipulating both overage payments and an overly-ambitious construction timescale the borrower was obliged to meet.

The £5m loan was structured to overcome the challenges imposed by the complex property title and overage, and to reduce the likelihood of cashflow squeezes in the course of the development project.

Rob Moore, Finance Director at the Northhold Group, said: “There were complicated elements to this site which had initially proved problematic for the development financing, also owing to the rigidity of the large banks. Then Covid came along, disrupting supply chains, forcing those less well-capitalised suppliers into liquidation and also threatening a severe reduction of financing options.

“Fiduciam worked closely with us to provide a facility that alleviates cashflow pressures exacerbated by the pandemic.”