In essence, a builder / developer comes to us for finance to complete a residential development. We source the funding through our clients who participate in the loan. The developer / builder then completes the development and repays the loan via sales/refinance.

No, the loan is structured in such a way so that participants receive their money back on sale/refinance of the development site.

Since 2009, on only two occasions have we had to seek enforced repayment on any loan. In one of these cases we achieved full repayment of the client capital together with interest equivalent to over 12% per annum to clients. On the other loan there was a client capital loss equivalent to 15% of funds invested in that loan. When taken as a % of our total loan book this capital loss is equivalent to 0.26% of all funds lent.

We always take a First Legal Charge over the development site with “step in rights” to help provide full control in the event of a default.

We ensure all build expenditure is vetted and signed off by the QS on a regular monthly basis. We obtain a professional valuation before drawdown confirming the GDV of the development. The full build costs are held in a designated clients account with the solicitor acting in connection with the particular loan. This is to ensure that the scheme can be completed even if the building contractor or borrower goes bust.

We regularly visit the site during construction to ensure it is going to plan and update our loan participants as the loans progress towards completion.

We monitor and prompt the borrower to pursue sales or refinance of the development to ensure timely repayment of the participants’ loan monies and have the ability to charge high default rates to focus the borrower on a timely repayment.

We do not advertise but have a small network of finance brokers and developers who forward a regular stream of development deals which we assess internally. We always visit the site and the borrower before finally assessing whether to offer a loan to our clients for participation.

9% pa is presently the typical rate we provide. Interest accrues and is added to the debt and repaid at the end of the loan at repayments by sale or refinance. We do have development opportunities where we sometimes offer up to 12% per annum. Helmsley also have development/ property deals where we offer our clients 25%+ depending on the security, LTV and risks involved, but these deals are undertaken via a different Helmsley Company.

We manage the loan on behalf of the loan participants and all funds required to complete the development are held in a specific solicitors’ client account. If therefore Helmsley became insolvent or ceased to exist for whatever reason, an Administrator could, if it was considered the right course of action, be able to continue to finance the completion of the development to ensure repayment of participants’ capital and interest.

If the borrower became insolvent, the funds to complete the development would still be held in the designated solicitors’ clients account so Helmsley would undertake a similar role to an Administrator or appoint an Administrator, to complete the development, sell the assets and repay clients capital and interest. However, Helmsley would consult with all loan participants regarding what action to take in the situation where a borrower becomes insolvent.

Helmsley is paid fees for managing the loan process on behalf of the loan participants.

Typically, Helmsley is paid an arrangement fee of between 1.5% and 2% of the loan amount when the loan draws down. Helmsley do also pay an introductory fee to the finance broker. This initial fee is sometimes paid separately by the borrower or on occasion is funded from within the facility. Helmsley also charges a further fee on repayment of the loan. This is typically calculated as a proportion of the interest charged to the borrower and usually amounts to a further 3% of the loan amount.

We have SIPP providers and Trustees who have reviewed our documentation and loan process and have accepted that our loan opportunities’ are SIPP compliant. Helmsley have the Legal Charge on the property and so if the Charge had to be relied on to take possession of the site then Helmsley would be the entity with “an interest in residential property” not the Pension Fund and the client investors. However, you would have to discuss with your SIPP provider as to their policy with regard to this type of investment.