Finbud’s step by step guide to the development Finance process

Here are the key steps:

  1. 1) Get in touch with a broker and explain your development project(s), provide a list of costs, expected profits and give an idea of how long the project will take. They will make an assessment of your development project and advise you on next steps.
  2. 2) If the Project is acceptable, the broker will go through all of the lenders to see what is a best match for your particular circumstances after taking your instructions. You will then receive a quote outlining the headline borrowing terms, the interest rate charges and fees as well as a list of all of the documents you must submit for your application.
  3. 3) The application will be completed and submitted to the lender
  4. 4) If the lender comes back positive, they will want to meet with you and visit the site of the development to enable them to fully understand the project. We, as the broker can also attend to help you with any questions that may be asked by the lender.
  5. 5) Your application will then go to the underwriters who will confirm and sign off if they are happy with the application. The lender will then send you a formal offer subject to valuation and any legal work that may be involved.
  6. 6) A surveyor will prepare a valuation report to include an analysis of the current value, expected development costs, gross development value and what the expected demand may be.
  7. 7) Your Solicitor will then carry out the legal work by carefully considering the terms of the agreement and ensuring that you fully understand the loan. Once you are satisfied, the formal offer can be signed and returned to the lender.
  8. 8) Now the funds can be released and the loan provided. Please remember that only the first stage of the finance is released as the finance will be released in stages.
  9. 9) You can now start your development!

 

Advantages of obtaining development finance

Compared to other methods, the main advantage is that it can provide you with the largest amount of funding. Typically, some funds are released at the start of the project. As construction progresses and the site becomes more valuable further funds are released in stages. Some lenders will provide funding for 100% of the construction costs on the basis of the expected value of the project.

Property that is considered unsuitable security to other lenders will be considered for development finance such as run down neglected buildings.

Interest can be added to the finance with no need to pay in monthly instalments. By releasing the funds in stages, you will find that there will be a reduction in interest rate charges as interest is only charged on funds that you receive.

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DEVELOPMENT FINANCE PROCESS, DEVELOPMENT FINANCE PROCESS, Finbud, Finbud

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