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Development Finance

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 sites.

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 development values.

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.

Equity
Mezzanine
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 projects.

Where appropriate long-term property finance can be arranged to provide 'exit' from initial, short-term development finance.

 
   

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