Development Finance

This type of finance is available for commercial and residential property to new and experienced investors from a large selection of Commercial Lenders and Hedge Funds. Finance can be arranged for up to 100% of the development costs.

Development Finance Criteria – UK Only – Updated March 2011

• Up to 70% of GDV including interest roll up with the use of mezzanine finance
• Up to 60% of GDV without the use of mezzanine finance
• Up to 100% of GDV – 100% development finance via an equity fund, for experienced developers only. Click 100% development finance for more information.
• Experienced developers and inexperienced developers
• Single large dwellings, Multi property sites, Apartment Blocks, Industrial
• Arrangement fees are charged on all deals starting at 1.00%
• Loans of £50,000 – £50,000,000+
• Apartment / Flats schemes available
• Sites with or without planning considered
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Property Development Finance incorporates:

• Finance for a Residential & Commercial Refurbishment
• Finance for New Build Flats & Houses
• Finance for Industrial Development

We also arrange Development Finance Scotland and Wales.

Our Typical Lenders Criteria:

• Loan Size £50,000 – £50 million+
• Terms Up to 36 months
• LTV 80% of total costs including Land / Site valuation, infrastructure, build costs and marketing costs.
• Funds released in stage and when needed, normally released after architect or surveyor certification of work completed. 100% arranged subject to additional security, mezzanine funding or 100% equity funding.
• As a guide, projects should show a minimum of 25% profit on costs
• Variable or Fixed rate options available
• Variable rates linked to the Bank of England Base rate or LIBOR

Typically a property development loan is arranged on an interest only basis and the term of the loan is between 4 – 36 months, though longer and shorter terms are possible. The term normally depends on whether the loan is for refurbishment or for a new build property. Two stage loans are normally involved in development finance, although they are not always required together. One stage is for the land or property purchase and the other is to fund the cost of the renovation or build costs.

The rate / margin offered by the lender will vary significantly depending on the case presented to them and whether the applicant is an experienced or new property investor / developer. All applications are assessed on a case to case basis. Rates can be based on a margin above the Bank of England Base rate or LIBOR rate, or the lender may provide the option of a fixed rate. Rates for development loans are typically from 2.5% above the Bank of England Base rate.

We don’t stop at the UK
**Development Finance outside of the UK only applies to PRIME DEVELOPMENT SITES and experienced developers with sufficient capital invested in the project**
The lenders on our panel can offer property development finance across Europe and as far away as Russia. They have recently agreed and offered to lend on residential and commercial developments in Russia, Romania, Turkey and Germany. Capital can also be raised for developments in; Austria, Azores, Balearic Islands, Belgium, Bulgaria, Corsica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Irish Republic, Italy, Latvia, Lithuania, Luxembourg, Madeira, Malta, Monaco, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, South America, Carribbean, Asia.

We can also offer offshore development finance arranged in Euros or other currencies for experienced property developers.

For further information call one of our specialist finance brokers on 0845 269 4965.