Distressed Site Rescue

A developer came to us with a project in serious trouble. Construction had stalled at first-floor level after a dispute with the main contractor. The original development lender had issued a default notice and was threatening to appoint an LPA receiver — which would have meant losing the site entirely.

The developer had 3 weeks before the lender could take enforcement action. They needed a new lender, a new contractor, and a credible plan to complete — fast.

Distressed refinances are the hardest deals in development finance. The existing lender was hostile. The site was partially built with no warranty in place. The original contractor had left site with disputed final accounts. And the clock was ticking.

Any new lender would need to take comfort from: (a) a new contractor's fixed-price completion quote, (b) a monitoring surveyor's assessment of work done to date, (c) a clear legal path to release the existing lender's charge, and (d) confidence that the remaining works could be completed within the new facility.

We moved at pace. Within 48 hours we had instructed an independent monitoring surveyor to assess the site and engaged a replacement contractor to provide a fixed-price completion quote. We identified a specialist rescue lender who understood distressed situations and could move quickly.

We prepared a detailed rescue appraisal and full business plan showing the cost to complete, the GDV on completion, and the profit margin available after repaying both the old and new debt. By presenting the deal and the borrower in the best possible light — with clear modelling, a credible completion strategy, and a robust professional team — we gave the rescue lender the confidence to commit at speed. The new lender's solicitor liaised directly with the existing lender to agree a redemption figure.

The new facility was agreed and drawn within 3 weeks — before the enforcement deadline.

The existing lender was repaid in full, the default was cleared, and a new contractor was on site within days of drawdown. The remaining construction took 9 months. All 12 units sold within 4 months of completion.

The developer preserved the project, their reputation, and ultimately made a profit — despite the project nearly being taken from them. Speed and specialist knowledge were the difference between rescue and ruin.