EXCLUSIVE: Blend Network funds largest ever loan in six minutes
EXCLUSIVE: Peer-to-peer lender Blend Network has funded its largest ever loan, taking just six minutes.
This was the first tranche of a £2.6m total lending facility, provided to a property developer looking to acquire and refurbish several properties in Gloucester, comprising both houses in multiple occupation (HMOs) and apartments.
The gross development value (GDV) was £4.6m and the loan-to-GDV (LTGDV) was 57%, with a maturity of 21 months.
The total development costs of the project, including the acquisition, amounted to £3.69m.
The first loan (£1.7m) will be used to purchase the property and provide funding towards the build, while further loans will be used to finish the building work.
Yann Murciano, CEO at Blend Network, said: “There is a huge funding gap in the mid-market development finance, for facilities below £10m such as this one, so this creates a significant opportunity for lenders like us.
“Despite ongoing economic uncertainty due to COVID-19, the UK property market has remains buoyant with both property prices and demand up year-on-year.
“So, the borrower behind this project is in a prime position to take advantage of this and we were delighted to be able to fund this deal in exactly six minutes at a time when many lenders have had to pull back from lending.
“This also illustrates the strong case for bringing alternative lenders into the fold when it comes to solving the UK’s urgent housing crisis.
“If we can fund £1,700,000 loans in just six minutes with our current investors, imagine what we could do by working with government-backed funding lines to fund the construction of hundreds of thousands of homes every year.”
Roxana Mohammadian-Molina, chief strategy officer at Blend Network, said: “The past 12 months has seen many lenders pull out of already-agreed deals and traditional lenders busy trying to administer the Coronavirus Business Interruption Loan Scheme, which has left many experienced property developers out in the cold unable to secure funding for their projects.
“So, alternative lenders like ourselves have stepped up to fill the funding gap and help property developers continue to focus on building the homes the country needs.
“Our lending appetite has also grown because we have thousands of investors ready to invest in projects, so we were not surprised when this £1,700,000 loan was funded in less time it takes to make a hard-boiled egg.”