Colchester - Bridging Loan

Investment Summary

Please note the max investment is £5,000 per investor.

• OVERVIEW – Investors in this opportunity will fund the acquisition of a 3.1-acre freehold site with outline planning for 26 homes to be developed in Colchester. Colchester is undergoing significant regeneration and there is a strong residential market in Colchester at present.
• TERM –The estimated term for this investment is 6 -12 months. If the loan is not repaid by the end of the estimated term, returns will accrue on investments for a further 12 months from the end of the estimated term up until the hard stop date (April 2024).
• PLAN – The borrower will use this bridging loan to acquire the site whilst they make the necessary preparations for full planning to be approved, carry out site surveys, address pre-commencement conditions, site clearance, and prepare the development team which is expected to take 6-12 months. When they are ready, the borrower intends to repay this loan by refinancing onto a development loan either with CapitalRise or another lender. Please note that investors in this opportunity are only funding the initial bridging loan, and will not be funding the development.
• LOCATION – The site is located in Colchester, a town within the north of Essex. The locality is characterised by a mix of uses, including medical, residential, agricultural and leisure. Colchester is undergoing significant regeneration with state of the art sporting facilities close by. Transport communications in the area are extensive.

• THE SITE – The site is situated to the west of Boxted Road and currently takes access from a secondary branch road. The proposed site is 3.1 acres of scrubland with outline planning for the construction of 26 residential properties with associated parking. The site is dispersed with overgrown vegetation, with mature trees bordering the site to the north,south and west.
• THE BORROWER – Although CapitalRise has not funded a loan to this borrower, the borrower is experienced and well known to the CapitalRise team. The main principal has been in development all their life, working alongside their parents who were developers. The principal went on to be a successful shareholder in various established, development companies that continue today, to provide newly built properties in Essex.
• YOUR INVESTMENT – CapitalRise investors will benefit from a First Legal Charge over the site, an unlimited Personal Guarantee and First Ranking Debenture over the borrower. Investments will always be first in line to be repaid when a payment is made against the loan. In the event of a forced sale of the site, CapitalRise investors would recover their investment first and if the borrower is unable to repay the loan, CapitalRise will seek to force the sale of the site on behalf of investors. If a sale is achieved the value would need to be less than 60% of the purchase price before your invested capital and accrued return are at risk. Please note the site is being purchased for £1.6m by the borrower (they negotiated a competitve purchase price), and Savills have provided an independent Red Book Market Valuation (March 2022) of the current site for £1.77m. For our LTV at exit calculations, we are using the lower figure (purchase price) to be more conservative.  If we used the CMV, the LTV at exit would be 54% rather than 60%.
• EXIT PLAN – In terms of exit, the borrower intends to refinance this bridging loan with a development loan from CapitalRise or another lender in order to build the scheme comprising 26 three and four bed family homes. At this point investors in the bridging loan will be repaid.