What are Property Development loans?
Property development loans come in all sizes and developers can either be very experienced or have little experience, for some, it may be their first project. Development loans are specifically designed to specifically help you with costly expenses that come with a development project.
As a developer, you need finance. The big question is what is the project and at what stage is the development. We need to understand the type of property loan required, is it a ground up development, part built, conversion, renovation or a new build.
Is the development residential, purely commercial or mixed use. Of course, this is not the only information required, but at this stage, the picture is beginning to form and we are starting to get an idea of the sort of product that might be required. Land without Planning Permission is not impossible to fund, but can be challenging as there is specific lending criteria that is involved with property development loans and a specific process that needs to be followed. If you’re wondering what options are available for you we would be more than happy to advise. Get in contact with us today to find out more about property development loans.
How much can you borrow?
Lenders use various criteria when assessing development loans, they look at the project and how it stacks up, experience, the gross development value (GDV), build cost and demand in the area for that type of development. Typically, the lending can be anywhere between 60% and 75% of the GDV. In some cases, lenders may consider up to 100% of the build cost. If there are other assets in the background, with good equity, some lenders may consider funding 100% of the project, although this is rare. Development loans are normally no longer than 24 months depending on the size and nature of the development project itself. The exit from this would normally be agreed during the assessment/application stage.
The expectation from lenders is that the development team has credibility and experience with the type of project they are considering. However, if you own or are the main investor, you can still get funding for the loan if you have the experience. Lenders will typically assess an application on an individual basis. We are here to offer expert advice on funding and how much you can expect to receive. Give us a call today to see how we can help on 0333 567 8960.
- Bridging Loans
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- Factoring & Invoice Discounting
- Asset Finance
- Revolving Credit
MOST BUY TO LET, COMMERCIAL MORTGAGES AND COMMERCIAL FINANCE ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
PLEASE MAKE BORROWING DECISIONS CAREFULLY, YOUR HOME OR ANY OTHER PROPERTY OR ASSET OFFERED AS SECURITY FOR A LOAN OR MORTGAGE MAY BE AT RISK OF REPOSSESSION IF YOU CANNOT KEEP UP THE AGREED PAYMENTS