Development Finance has been designed by our Lenders, to
provide residential and commercial developers with a real
alternative to traditional High Street funding, which SME's can
often find restrictive.
We will provide specialist funding up to 85 per cent
for multiple developments including Greenfield and Brownfield
Once the development has been completed the client can either
sell the properties on the open market or refinance the loan
with another lender.
All types of residential, commercial and industrial developments
can be funded. Property developments across the spectrum from
multi million commercial property developments to residential
property developments costing tens of thousands of pounds.
Property development finance rates differ dependent on the
applicant’s experience, the industry sector and the nature of
the proposal but a good benchmark to consider would be Bank Base
Rate + 1.5% to 2.5%.
Property development finance is usually arranged on an interest
only basis and the term of the loan can be one year plus
depending on the size and nature of the underlying project.
Loan to project costs will be influenced by projected gross
property development values but funding would typically be in
the region of 70% to 75% of the purchase price and build costs.
It is also possible to organise a loan to finance up to 90% of
the property development costs where the borrower already owns
the land on an unencumbered basis.
Where the property developer is able to improve the planning
consent post acquisition, we are able to negotiate increased
levels of funding which recognise higher land and gross
Mortgages for Business negotiates finance requirements with a
full panel of property development lenders and other financial
institutions to provide the right 'match' to the project.
We offer a full range of development finance options at every
stage of the development process.
Senior (bank) debt
Typically, the maximum senior debt finance achievable will be
equal to 75% of total costs. However it is important to consider
our ability to re-gear finance against planning gain, enhanced
value at the project end, therefore vastly increasing finance
potential. In short, we can finance on the increased value of
the property post development.
For experienced property developers with a strong track record
90% of build out costs can be obtained.
We have access to providers of mezzanine finance and equity
participations that can reduce the amount of development capital
that is required to inject into individual property development
schemes. Whilst terms will often differ significantly from
senior debt finance, this does provide a developer with an
opportunity to enhance returns from individual development
Where appropriate long-term property finance can be arranged to
provide 'exit' from initial, short-term development finance.