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Property development loans comes in all shapes and sizes and we are confident in our ability to arrange the required finance for property developers. We can help if you need funds to:
Purchase land
Purchase property
Capital raise for other projects
Refinance existing debt
Commercial lending institutions will all have slightly different views on the lending market and where they wish to position themselves. Some take a higher degree of risk, some only wish to trade within certain areas or industries and some are not happy lending for property development purposes.
Fortunately, many of our Investors are happy with financing property development projects, based on a history of successful outcomes for both the bank and the customer. Our Investors actively seeking out property development business and are quite prepared to accept the risk of development finance, because they understand it and are set up to deal with it.
Typically property development finance will be used for:
Property refurbishment
New build projects
Property conversions
Land purchase
As with other commercial loans, property development loans will be secured against the land or property you wish to develop.
Who can borrow?
Individuals
Partnerships
Limited Companies
Trusts
LLPs and several less well known business vehicles
How do the products work?
Typically, loans are available over a twelve to eighteen month period in order to fund the land/building acquisition and the development costs. The loan is split onto two parts; up to 60- 65% of the undeveloped “site” acquisition and 65- 70% of the build costs, drawn down in stages.
The build costs can include, architects and other professional fee’s, your wages/drawings if you need them, a 15% contingency to cover cost/time overruns, and the interest payments on both loans rolled into the total facility.
The total potential loan should not exceed 65-70% of the developed value of the project. In effect, these loans take the form of a secured bridging facility, they are not “ term loans”, and are not assessed as such, unless your exit strategy is to retain the developed building, for say letting purposes. The lender will want to know your exit strategy at outset.