FOUR new luxury apartments have been built in Bangor as a result of the developers benefitting from the largest sum of peer-to-peer (P2P) funding raised so far through the British government’s Bank Referral Scheme.
House-building specialist County Down Developments had been turned down for a loan by its bank Barclays, which then offered a referral to the scheme’s three designated funding platforms.
Its directors chose to seek funding through the Alternative Business Funding (ABF) platform - and as a result they were offered £250,000 by P2P funder Blend Network.
The company's co-founders Albert McCann and Michael Carnduff bought the land at Balloo Road in Bangor for just £66,000 (the same plot had been worth £240,000 before the 2008 financial crash).
And now they are looking at a healthy return of more than £100,000 on their investment (based on initial forecasts of a development cost of £316,000 including purchase of the site, and the four apartments likely to fetch in the region of £115,000 to £120,000).
Michael Carnduff of County Down Developments said: “Although we have almost 60 years of combined experience in the construction industry, the company itself was new.
"Unfortunately that meant we didn’t meet Barclay’s funding criteria of having a minimum of six projects or four-to-five years’ construction experience under our belts.
“However, we were pleasantly surprised when, because of the Bank Referral Scheme, Barclays pointed us towards the funding platforms.
"We were expecting crazy interest rates in the region of 35 per cent, but we were wrong.”
He said the most important aspect of the Blend Network funding was its flexibility.
The arrangement provided a gradual draw-down of the money over an 18-month period on an ‘as required’ basis.
As a result, County Down Developments could pay suppliers promptly, leave money with them on deposit and negotiate discounts.
Mr Carnduff added: “Small construction firms need the funding from P2P lenders to ensure growth in Northern Ireland. It’s critical.”
Blend Network chief executive Yann Murciano said: “We’re delighted to have given County Down Developments access to such a landmark deal in the UK.
“Currently the banks, understandably, want to take almost zero risk. But as peer-to-peer lenders we can provide access to loans that offer an excellent balance between risk and reward and, in the case of developers, can be backed by the properties themselves.”
