Alternative Bridging Corporation has provided a £1.3 million overdraft facility to a Cotswolds-based housebuilder experiencing cash flow pressure due to delays between property reservations and completed sales.
The developer required access to £1 million to support operations after transactions took longer than expected to complete. Despite having properties under reservation, the extended completion timeline created working capital constraints for the business.
Facility structure
The lender structured the funding through its Alternative Overdraft product at 55% loan-to-value, with a gross funding amount of £1.3 million. The facility allows the borrower to draw funds as needed rather than taking the full amount immediately, providing flexibility to manage working capital between agreed sales and completion.
The transaction was led by director and chief commercial officer Jonathan Rubins, with support from Mihaela Janko, manager of the case management team, and Hannah Scheuber, senior underwriter. According to the lender, coordination between lending and legal teams facilitated the transaction’s progress.
Market context
The case highlights a recurring challenge in the housebuilding sector, where reserved sales do not immediately translate into available cash. This timing gap can create pressure on developers’ finances, particularly as the UK housing sales outlook weakens and transaction timelines extend.
“A property can be reserved, the buyer can be committed, and yet the developer may still have to wait weeks or months before those funds actually arrive,” Rubins said. “That gap can put unnecessary pressure on an otherwise healthy business, particularly when capital is needed to keep existing projects moving.”
He added that the structure of funding is as important as the amount available, with overdraft facilities allowing borrowers to access capital when needed without taking on full borrowing costs from the outset.
The facility comes as mortgage costs have risen significantly over the past decade, affecting both buyers and developers in the residential property market.
