A group of developers came to BLoC seeking financing for a project that consisted of 20 residential lots in fast-growing Vernal, Utah.
The borrowers had a buyer for the property (under contract) who had made a $100,000 down payment. The property was attached to 135 acres of borrower-owned, un-improved land.
The borrowers were almost finished acquiring the entitlements which would allow them to build single-family homes on the 135 acres. Therefore, they needed the cash to continue land improvements, and they needed a collateralized “bridge loan” until the first 20 lots were sold.
The 4 borrowers were CPAs and tax attorneys by trade. All signed guarantees and security agreements pledging their other assets, in addition to the 20 building lots. The loan amount was only 45% of the value of land — and the personal assets of the combined borrowers exceeded $4 mil.
BLoC issued a 1st Deed of Trust and a Note. The interest rate was 16% with origination and loan fees of 3.5 points. The buyer of the 20 lots, who had made the down payment, closed the deal with the borrower, and BLoC’s loan was paid off in 29 days.