Whether you are an experience Property Developer or beginning your first project, we can assist with arranging finance for:
- Residential Projects
- Commercial Projects
- Heavy/Light Refurbishment
- Conversions/Renovations
- Build to Let
- Development Exit
Development finance is used to fund the Conversion, Heavy Refurbishment or Ground Up Developments of a property or properties, both for Residential and Commercial use.
Once agreed, the funding is provided by the lender in stages, allowing works to be completed to meet the developer’s schedule.
The interest is retained by the lender as each stage is drawn down, meaning there are no monthly payments to be made. When the development is complete, the loan is redeemed along with any interest that has accrued.
When considering a maximum loan, lenders will consider the below elements:
- Loan to value (LTV) – The loan to value ratio is used to calculate the maximum available advance at any one time
- Loan to cost (LTC) – Developers will be expected to provide funds themselves towards the cost of the works. Therefore, lenders will typically lend up to 90% Loan to the Cost of the works
- Loan to gross development value (GDV) – This is the maximum percentage of the value of the project once completed
The lender will review all three of these metrics to calculate the maximum loan.