Let’s say a potential borrower wishes to purchase a site for £2,000,000 and has a plan to build several flats within the complex. He assesses that to achieve this plan, it would cost £2,800,000 but ultimately he expects that he can sell the development for £6,000,000.
The borrower would like two things: Finance to fund the purchase and finance for the full build costs. We can assist by obtaining a loan for up to 70% of the purchase of the site and 100% of the build costs, as long as the total borrowing is less than 90% of the total cost of the Project.
The amount needed for the purchase (the 70%) would be released upfront. The remaining amounts would be released over the term of the loan.
The last thing to consider is whether the funds borrowed fit the lender’s Loan to gross development value (GDV) calculation. You would check this by calculating the loan amount as a percentage of the Gross development value to ensure that this would fit the lender’s criteria.
Please note that there are lenders who fund a 100% of land and build cost on a profit sharing basis. Get in touch if you would like more information about 100% development finance.
What we can offer you in terms of development finance?
Understandably, finding the right deal can be difficult as there are so many factors to consider and it can be more difficult to find the right development finance loan as opposed to other types of funding. Information from lenders is limited. Our comparison table goes some way in helping you, but expert advice is essential as this area can be complex.
Our advisors have access to the whole property development finance market which mean that we can do the hard work for you instead of you individually contacting all the lenders (which may not be the ones who can provide you with what you want).
Using our expertise, we will compare lenders to ensure you obtain the best option to match your requirements first time round. We provide impartial advice as we have your best interests in mind.
We can help you save money, time and hassle and at the same time aim for a fast turnaround. We understand that you will have a lot of other things to think about as you prepare your development project.
We will take the time to fully understand your project from start to finish and look closely at your funding requirements, then identify your options and discuss next steps highlighting the costs and advantages and disadvantages of each option so that you are able to make an informed choice and more importantly the right choice for you!