The Stepping Stone Group has received a £7.3 million three-year funding package from Broadwood Capital, arranged and structured by capital advisor Arc & Co.

The package was split into two loans and secured by an existing operating care home and adjoining site with consent to deliver retirement living units in Nynehead, Somerset.

Nynehead Court is a Grade II listed building set in 13 acres of parkland and gardens providing 42 beds. The adjoining Nynehead Court Farm site has full planning consent initially to deliver six retirement living units and potential to extend this to further units at a later date.

With an average loan-to-value of 72.5%, an initial loan was used to repay three existing lenders, with a second facility available to fund the construction of the retirement living units when development commences at the end of the summer.

John Bailey, founder and owner of The Stepping Stone Group said: “This was a long and complex process given the nature of the underlying property and the parties involved.”

Dan Smith, chief executive of Broadwood Capital commented: “The later-living sector remains a key focus for Broadwood Capital. The ageing demographic in the UK continues to create huge pressures on a sector which is undersupplied..

“We are looking forward to working with John Bailey and his team at The Stepping Stone Group through supporting their plans to improve and expand Nynehead Court Care Home and develop out later-living units on the Court Farm site, delivering essential care beds and retirement living units.”

Andrew Robinson, Arc & Co. chief executive and lead advisor on the case, added: “This was a complex transaction, involving three outgoing lenders and an asset class which is widely accepted as difficult to secure funding for at present. We worked closely with the client and Dan at Broadwood to find a solution which maximised the strong cash flows from Nynehead Cout Care Home to provide the required leverage to develop out the Court Farm site, all whilst managing the outgoing lenders’ position and expectations.”