What you need to know about Clearwell Capital
Clearwell Capital was founded by Ed Marley-Shaw in 2013 and assists small and medium sized housebuilders and developers with their funding requirements. We have provided £20m in finance to support the construction of over 600 homes in 63 separate projects across the UK.
Clearwell Capital provides mezzanine finance to property developers to facilitate the construction of residential housing.
How does development finance work?
The problem faced by developers, when building residential housing is that they are required to pay the costs of land, building materials, labour etc. before they receive money from the sale of housing.
Developers solve this through borrowing from development finance providers, repaying them out of the revenue from sales of housing.
Clearwell Capital receives second charge over the property as security for funding behind senior lender.
What is Mezzanine Finance?
It is not always the case that developers will have these funds in the bank, hence they will turn to mezzanine finance providers to bridge this gap to make the project possible.
We typically provide mezzanine finance, topping up senior debt from 75%-80% of costs to 90% of costs.
From time to time, we provide equity on certain projects, funding up to 100% of costs.
Why we support small property developers
1. There aren't enough houses being built
It is common knowledge that currently there is a housing shortage in the UK. Since the financial crisis, housebuilding has not kept up with the demand for new housing; it is estimated that between 250,000 new homes are needed each year, while only 140,000 are being built,
This divergence has been spurred by the substantial decline in the number of houses built by small and medium size developers. The number of houses built in 2015 by small and medium size housebuilders has fallen about 74,500 compared to 2008, with volume producers increasing production by 26,000 over the same period.
We believe the prime cause of this drop in housebuilding by small providers is the lack of funding available following the global financial crisis
2. Architectural diversity
We feel that the variety and quality of developments created by smaller developers contributes to a more diverse and colourful architectural landscape, when compared to the homogeneous estates often produced by larger housebuilders. By supporting small property developers, we can help create a world in which architectural diversity flourishes.