We have always found Advias to be extremely responsive and creative. They have an open mind in terms of assisting with deal structuring ideas and finding lending solutions for purchase and development finance. They have been extremely effective in remaining involved and managing the process with lenders throughout.
What is development finance?
Development Finance is a specialist type of property finance which enables the purchase and development of residential and commercial property.
The development finance options are significant, both in terms of how the finance can be structured and in the number of development finance lenders.
Which lenders offer this finance?
Development Finance is a commercial loan, it is available via commercial and specialist lenders who understand property construction.
These lenders can be part of a high street bank, building societies, backed by funds or family offices.
Many do not actively promote themselves to the public and work with carefully selected broker partners.
How much can I borrow with a Development loan?
Generally, you can borrow up to 75% of the purchase price or property value, plus 100% of the build costs.
Lenders structure their lending according to their own criteria, we will work with you to fulfil your requirements in a way that suits your needs.
Projects can be financed either:
On the basis of a maximum ‘Loan to Cost’
OR, A maximum ‘Loan to GDV’
All lenders have their own criteria, we can quickly match up the correct lender depending on the level of work required, geographical location and your own property development experience.
What is the cost of a light refurbishment loan?
Lending rates vary significantly and change on a regular basis. It is important that you work with a broker that is aware of these changes, so they can arrange finance which is both deliverable and cost-competitive.
Generally, interest will be rolled into the loan, therefore no monthly interest payments will need to be serviced. The interest is repaid on the refinance or sale of the property along with the original loan balance and any arrangement fees that were added to the loan.
Some lenders charge exit fees, which we consider the lowest total cost solution.
Development Finance For First Time Developers
Most development finance lenders will need a developer to have relevant experience and show that they have built out similar projects in the past.
However, it is still possible to arrange development finance even if the developer is starting out or has previously developed much smaller sites.
The lender will need reassurance that the borrower has the right team with relevant experience and the scheme may need to be small with good fundamentals.
Why Use A Development Finance Broker
A good development finance broker will ensure the best match is made between a property developer and a development finance lender. This covers the amount of leverage, scheme criteria and negotiating the best terms.
Advias constructs cashflow projections and models out client schemes to optimise the right combination of senior debt, mezzanine finance and equity.
We have a wealth of development finance lenders in this area, including banks, building societies, specialist lenders, peer-to-peer and private family offices.
Get Property Development Funding Today
We want to help fund your development finance in the most optimal structure. We will advise on and arrange the available options, letting you focus on delivering your project or finding the next scheme.
We offer a personal service and you deal with an expert who can understand your needs and deliver accurate solutions in a timely manner.