H2B Investments

The perfect site came up 5 years too early for H2B (or so they thought) – the Brickflow platform was able to show them that with clever structuring you can do less with more.

Reduced deposit (Million)

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Interest rate

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Annualised Return on Capital Employed

The borrower

H2B Investments Limited is a West Midlands based developer that uses their strong community ties to realise planning gain and larger scale development opportunities.

The challenge

H2B had a tremendous opportunity that had arisen through their strong local connections. However, at 63 new-build units, the opportunity had come about a bit sooner than they would have liked. It was a big step up in terms of development size, but it would also mean a lot more equity was needed.

I couldn’t recommend Brickflow highly enough. The platform has really helped us progress a lot quicker than I would’ve ever imagined. Our business is 10 years further forward than where we thought we’d be, as we’ve learned how to structure our funding properly. Brickflow has enabled us to go into the bigger schemes a lot quicker, and grow our business, exactly how we want to.

The soloution

By splitting the development into phases, they were able to overcome both hurdles. We were clearly able to demonstrate through Brickflow, that as a single phase, their deposit would need to be close to £ 2.7m. This would have meant borrowing the bulk of the deposit from investors, and paying away a huge percentage in profit share.

Also, based on the level of previous personal development experience, a lot of lenders would have seen this as too big for them as it’s verging on the type of scheme a regional house-builder undertakes.

By running 2x phases and a more manageable 33 unit and 30 unit scheme, we were able to demonstrate through Brickflow that the equity requirement was reduced to just £ 908k. A much more manageable amount. Lenders would also be more receptive to the application due to a reduction in scheme size.

Whilst H2B know they have the construction experience, by their own admission, their lack of understanding around how to structure finance to minimise equity, and maximise profit, was holding them back. In the words of the owners of H2B, their business is now 5 to 10 years further along than it was thanks to Brickflow. 

The Results

 H2B had been told by one of their lenders that they would need a deposit of £2.7M (GDV of £12.6M) Through one of Brickflow’s preferred lenders, H2B received a lower deposit, that was reduced by £1.79M. With an interest rate of 7.92%. 

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