€4.5m developer loan, Santa Creu (Mallorca)

Developer and project situation

The borrower required further capital for a six-unit residential building in Santa Creu, Palma. Construction was already materially advanced, so the funding assessment centred on the remaining works, the current value of the development and the route to commercialisation once the homes were complete.

Development finance requirement

The transaction required €4.5m against an asset valued at €10.5m, producing a 43% loan to value. This was development finance rather than a residential non-resident mortgage: repayment depended on completing and selling the units, not on a private buyer’s salary or long-term mortgage affordability.

• Six residential units in a strategic Palma location
• €4.5m facility against a €10.5m asset value
• 43% transaction LTV
• Sales of completed units formed the exit strategy

Assessment and funding approach

The specialist finance team reviewed construction progress, the underlying real-estate value and the feasibility of completing and selling the scheme. A tailored developer loan was then structured around the remaining project execution rather than treating the partly completed building as a standard investment property.

Completed outcome

Funding was delivered within 36 days, allowing the developer to continue the works and move the project towards sale. The agreed exit remained the disposal of the six residential units after completion. The case demonstrates the importance of aligning a development facility with the build stage, verified asset value and realistic sales strategy.